Coffee prices are skyrocketing, leaving the coffee service industry in disarray.

Since before the Lunar New Year of 2024, coffee prices have been updated daily by businesses, distributors, and coffee service industries due to their continuous "skyrocketing" price increases. Even now, coffee prices show no signs of cooling down, continuing to reach new highs, causing headaches for both purchasing businesses and the service sector.

Constantly setting price records

On forums and coffee business groups, information about rising coffee prices is hotter than ever. Price records are constantly being broken; currently, 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 price of the same period last year.

Coffee prices have risen to their highest level in 15 years.

With rising coffee prices, the cost of some food and beverage services has also increased, putting considerable pressure on coffee shop owners, as the cost of raw materials from suppliers has also risen sharply. Recently, in Phan Thiet city in particular and in the districts and towns in general, coffee shops of all sizes have sprung up like mushrooms, meeting the growing tastes and demands of the people in the province. However, faced with the skyrocketing price of coffee, most coffee shop owners find it difficult to choose whether to raise prices or keep them stable due to the fierce competition in this industry. “If we raise prices, the number of customers will drop immediately, because there are so many competing cafes now. Even a difference of 1,000-2,000 VND per cup is enough for customers to compare prices. But if we maintain the old prices, I'm afraid the cafes that are currently renting expensive premises won't be able to survive. Therefore, since after Tet, I've seen many cafes, from sidewalk cafes to those with significant investment, starting to raise their prices,” said Mr. Hoang, the owner of a cafe on Le Loi Street in Phan Thiet City.

Most coffee shop owners find it difficult to choose whether to raise prices or keep them the same when coffee prices are high.

Ms. Hang, who has been running a sidewalk coffee stall on Ton Duc Thang Street in Phan Thiet City for over a year, said: “I import pure coffee beans for sale in coffee machines for just over 130,000 VND/kg, but since Tet (Lunar New Year), the supplier in Dak Lak has been continuously increasing the price, from 150,000 VND, to 210,000 VND, and now it's 270,000 VND/kg. With a selling price of 15,000 VND/cup of black coffee, I'm not making any profit when the price has increased by more than 100%. From March 2024, I informed my regular customers that I would increase the price by 1,000 VND/cup, but the number of customers has decreased significantly compared to before.”

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

Struggling to keep prices stable.

The owner of a large coffee shop (on Hung Vuong Street, Phan Thiet City) further shared: “One kilogram of blended coffee (70% Robusta – 30% Arabica) now sells for over 250,000 VND/kg, instead of 180,000 VND/kg at the beginning of 2023. Therefore, if we don't increase prices, we won't be able to survive. We were forced to raise the price of machine-brewed coffee from 18,000 to 20,000 VND/cup and had to explain the situation to customers to gain their understanding.”

According to business predictions, coffee prices are likely to surpass the peak of 120,000 VND/kg.

However, not all cafes drastically increased prices; some maintained their current prices. According to their analysis, some cafes target low- and middle-income customers, making them very sensitive to price increases, as even a slight increase could lead to losing customers. Furthermore, coffee is the least expensive item on the menu, so price increases are still manageable. Instead of raising the price of a cup of coffee, these establishments are focusing on selling more juices, teas, or offering various breakfast and coffee combo deals to increase revenue.

According to our research, the high price of Vietnamese coffee, in addition to the global trend, is also due to limited supply. In previous years, coffee prices were consistently low, causing many farmers to switch to crops with higher economic value. Therefore, the total coffee production figures are inaccurate, leading to a supply shortage compared to calculations, pushing coffee prices up. Businesses predict that the price of fresh coffee could exceed 120,000 VND/kg. This price level will put coffee processing and export businesses in an even more difficult position. Furthermore, experts predict that some roasted coffee brands on the market may adulterate their products with burnt roasted corn or soybeans, compromising food safety, in order to fulfill existing orders while supply remains insufficient. Especially, consumer demand still favors filter-brewed coffee over machine-brewed coffee, giving coffee powder mixed with corn or soybeans an additional price advantage.

Source: https://baobinhthuan.com.vn/gia-ca-phe-phi-ma-nganh-dich-vu-ca-phe-lung-tung-118709.html