Coffee prices “skyrocket”, coffee service industry in confusion

Since before the Lunar New Year 2024 until now, coffee prices have been updated daily by establishments, distributors as well as coffee business service industries because they have been continuously "skyrocketing". Up to this point, coffee prices have shown no signs of cooling down as they continue to set new peaks, causing headaches for both purchasing businesses and the service industry.

Continuously setting price records

On forums and coffee business groups, information about coffee price increases is hotter than ever. Price records are constantly being broken, at the present time, the price of fresh coffee has reached over 100,000 VND/kg - the highest price recorded by the agricultural sector in the past 15 years, double the same period last year.

With the increase in coffee prices, some food and beverage services have also increased, putting a lot of pressure on those who are running coffee shops, because the cost of raw materials from suppliers has also increased sharply. Recently, in Phan Thiet city in particular and districts and towns in general, the number of coffee shops from small to large has sprung up like mushrooms, meeting the tastes and increasing needs of people in the province. However, with the current situation of skyrocketing coffee prices, most coffee shop owners find it difficult to make a choice, increase prices or maintain prices because of the fierce competition in this industry. “If we increase the price, the number of customers will decrease immediately, because there are too many shops competing with each other, just a difference of 1,000 - 2,000 VND/cup is enough for customers to compare. But if we maintain the old price, I am afraid that the coffee shops that are currently renting high-priced premises will not be able to survive. Therefore, after Tet, I have seen many coffee shops from sidewalks to those with investment have started to increase their selling prices,” said Mr. Hoang - owner of a coffee shop on Le Loi Street - Phan Thiet City.

Most coffee shop owners find it difficult to make a choice, whether to increase prices or maintain prices when coffee prices are high.

Ms. Hang - a sidewalk coffee business on Ton Duc Thang Street - Phan Thiet City for more than a year said: "I import pure coffee to sell machine-brewed coffee for just over 130,000 VND/kg, but since Tet until now, the owner of the establishment in Dak Lak has continuously increased the price, from 150,000 VND, to 210,000 VND and now it is 270,000 VND/kg. With the selling price of 15,000 VND/cup of black coffee, I have no profit when the coffee price has increased by more than 100%. From March 2024, I informed my regular customers to increase by 1,000 VND/cup, but the number of customers has decreased a lot compared to before".

Coffee prices have increased by more than 100% over last year.

Manage to keep the price

The owner of a large coffee shop (Hung Vuong Street - Phan Thiet City) shared: "A kilogram of coffee mixed with a ratio of 70% Robusta - 30% Arabica has a selling price of more than 250,000 VND/kg, instead of 180,000 VND/kg compared to the beginning of 2023, so if the price does not increase, the owner will not be able to bear it. We are forced to increase the price of machine-brewed coffee from 18,000 to 20,000 VND/cup and have to explain to customers for understanding."

According to business predictions, coffee prices are likely to exceed 120,000 VND/kg.

However, not all shops have massively increased prices, some shops still keep their prices the same. According to their analysis, some shops target low- and middle-income customers, so they are very price-sensitive, and even a slight increase will cause them to lose customers. In addition, coffee is the drink with the lowest cost of ownership on the menu, so the increase in the price of ingredients is still under control. Instead of increasing the price of a cup of coffee, these establishments promote the sale of additional juices, teas, or offer many programs, breakfast and coffee combos to increase revenue.

According to research, the high price of Vietnamese coffee is not only due to the world trend but also due to limited supply. In previous years, coffee prices were always low, causing many gardeners to switch to crops with higher economic value. Therefore, the total coffee output will not be true to reality, leading to a shortage of supply compared to calculations, pushing up coffee prices and according to predictions of businesses, it is possible that the price of fresh coffee will exceed the peak of 120,000 VND/kg. With this price, coffee processing and exporting businesses will fall into an even more difficult situation. In addition, experts predict that some roasted coffee brands on the market may add corn and burnt roasted soybeans, which do not ensure food safety, to cope with and supply signed orders when the supply is still in short supply. In particular, consumer demand still prefers filter-brewed coffee over machine-brewed coffee, so ground coffee mixed with corn and soybeans will have an additional price advantage.

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