Commodity Market Prices Put Squeeze on St. Charles Coffee Shops

Bonnie Brooks likes her coffee as much as anyone but she has started to notice one worrisome difference of late – the cost.

If things keep going as they are, she may have to make some adjustments.

“I’ll probably alternate what I drink with tea and alter my drinking habits,” said the St. Charles resident.

It might not be the easy choice to do without that all-important morning cup of joe, but for Brooks and many others, it may start becoming an option.

Prices on coffee worldwide have been rising, hitting highs not seen in more than a decade. According to a recent article in the Christian Science Monitor, prices for raw coffee beans have nearly doubled in the past year while coffee futures are up by half with growing demand and increasing speculation in the popular commodity to blame.

The reaction has been felt across the nation already. Media reports note that , Kraft, J.M. Smucker have all boosted prices.

Locally, independently owned outlets are trying to survive the onslaught of higher costs as well. Stein Hunter, owner of on First Capitol, said his establishment was forced to raise prices by about six percent last week.

“We held out for as long as we could,” Hunter said. “The market has the potential of going down as any commodity does but it’s not showing any signs of it so we ended up raising our prices.”

Hunter, who has been in business nine years, calls the new pressure in the coffee market unprecedented. He said customers have been understanding, especially since so many other coffee shops have already been forced to boost prices.

“People have known about this for a month so while nobody’s happy about the price of something going up, it’s the world we live in,” he said. “There hasn’t been any great fluctuation in coffee prices over the last six weeks so most everybody has already made the move.”

Hunter primarily blames speculators for the problem.

“Coffee is the number three traded commodity in the world,” he said. “It’s in the same situation as oil. It’s all about speculation. It’s not really supply and demand that drives the price.”

At on North Main St., owner Chris Schulte said his coffee house is holding the line – at least for now.

“We haven’t raised prices yet. We’re trying not to,” he said. “We’re trying to think of ways to be more efficient but in any business you have to keep up with the cost of inflation. If you are not raising your prices on an annual basis, you are falling behind and won’t be in business long.”

That’s especially true now with costs heading skyward. Schulte said Picasso’s tends to review its prices every two years. The most recent price increase was last summer – around the time the market started to rise. He said he is still hoping to hold off until next year.

“You just get caught up and then they raise you,” he said. “We raised our prices just to get caught up to where we should be and then immediately afterwards, our wholesale was raised back to us so you are constantly struggling to keep up with that.”

A company’s business model can also make a difference with regard to price as well. Some establishments have noticed the price hike but haven’t been put into as big a squeeze. Tony Caruso, co-owner of the , said he’s aware of the increase.

“I’ve read a few articles about it and the price from our supplier went up,” he said.

But his small Frenchtown eatery hasn’t been pushed to a price increase on coffee at the present time.

“Coffee is not a huge part of what we do,” he said. “We’re more of a café. We don’t go through that much coffee so it’s not hitting us that hard.”