Prices are constantly rising, but consumers remain — the market predicts 30% increase in coffee price
Main trends in the Russian coffee market
The cost of Arabica coffee on the exchange has reached its maximum since 2011, and the market predicts an average increase in prices for all types of coffee by 20-30% by the end of the year. While the largest supplier of Robusta — Vietnam — is experiencing a typhoon and a lack of rainfall, and the main supplier of Arabica — Brazil — is experiencing a drought, businesses are raising prices. However, as experts interviewed by Realnoe Vremya unanimously stated, the end consumer does not refuse the drink and is ready to pay more. Read more about the Russian coffee market in the article.
“There was no catastrophe anywhere”
Price growth is constantly observed in the coffee market, says head of the Marketing Department of Tedjas Coffe Tatyana Chechetkina. However, she doubts that the price will increase by 20-30% — there are no grounds for such significant changes.
“Coffee has fluctuations. Prices are indeed rising now — a number of roasters are raising their wholesale prices. It is difficult to say yet whether there will be a 20-30% increase. There was no such significant growth, but nevertheless, in September, a number of roasters updated their prices. There was an increase not for all, but for some items,” she said.
Chechetkina also named the factors that affect the cost of coffee. These include: the climate in the countries of origin, storage and transportation conditions, transportation costs, berry quality, political situation and much more.
“Specifically, the cost of coffee in Russia is affected by the ratio of several factors. If in 2022 the political situation played a role, now it is the difficulties in the supplier countries,” she emphasised.
In general, the expert assessed the situation on the coffee market as stable, so consumers will not refuse the product — the increase in price is not so significant:
“Prices have always risen, fallen, risen. If some large-scale event occurs, then the price flies into space. Now there is no such situation for coffee to increase by 30%. There have been no catastrophes anywhere. Fluctuations in coffee prices are the norm. They have always been, are and will be. The market is growing, the coffee industry continues to develop.”
“People believe in the market”
Another expert, Chairman of the Board of the Association of Restaurateurs and Hoteliers of Tatarstan, owner of Skazka family restaurant Mikhail Sharipov agreed with the thesis about the favourable situation on the coffee market. According to him, consumer demand for the product is only growing.
The cost of coffee is affected by consumer demand. Now we are seeing its growth. It is justified by the fact that incomes are indexed, opportunities appear for those who did not have them before. They begin to use the services of restaurants and coffee shops. I agree that the cost of coffee is growing and will grow, but 20-30% is too high an estimate, he believes.
Sharipov is confident that the situation on the market is stable and will only improve. The segment is growing by 10-15% per year:
“On the one hand, consumer demand is growing, which leads to market growth, on the other hand, prices are growing. This may be due to the climate, to the disruption of logistics chains around the world. Revenues are growing, but the number of orders is not growing by 20-30%, so such a price increase is unlikely.”
He also said that entrepreneurs continue to open new projects:
“There is a trend of opening new projects. And projects are opened only if entrepreneurs see prospects. Accordingly, people believe in the market, they see that there is a consumer.”
“People don't buy a product, they buy a lifestyle”
The rise in prices for raw materials does not have such a sharp impact on businesses and consumers, said Artyom Tyazhelov, co-owner of the Daft Pub, Bistro Artel, Drink Craft and Gurme establishments. He believes that there are reasons for the rise in cost, but these problems are not critical.
“Over the past year, coffee has been constantly rising in price — about 20% per year. This is a normal, stable phenomenon. I have not seen any surprises — the rise in price is gradual. Recently, major players have seen growth. Some raise by 10-20 rubles twice a month, some by 30-40 times a year. There have been no wild, unpredictable jumps,” he assured the citizens.
The expert also emphasised that coffee has indeed become an expensive product, and the average bill in a coffee shop has reached restaurant levels.
“The average bill in a good coffee shop seems quite significant to me. If you take a couple of coffees and buns, you get almost the average restaurant bill. Although usually in to-go coffee shops there is much less service, the consumption is much lower,” said Tyazhelov. “ However, there is demand for this.”
And the demand, according to the speaker, remains at the same level. Consumers, despite the rise in prices, continue to buy coffee:
“The rise in coffee prices does not affect the attendance of establishments. It seems to me that people buy not a product, but a lifestyle. If you like the philosophy, the vibe of a certain establishment, you are go there. It's not just buying coffee. That's why you're willing to pay more.”