What Affects the Price of Coffee at the Supermarket?

Ever wondered what goes into the price you pay for coffee at the supermarket? Here are some factors that affect the general price level you pay. There are of course, individual differences in the brands and their marketing that will affect their price, but that isn't the focus here. 

1. Price of Raw Coffee


The cost of the coffee beans to the roaster is an obvious factor affecting the price of coffee for the end-customer. Take a look at the NASDAQ coffee futures chart and you can see that there have been wild swings in the coffee price over the last three years. Weather conditions and crop yields are a major factor here. 

2. Shipping


It takes a lot of logistics and transportation to bring the coffee beans from the plantation to the roaster and from the roaster to the distributor and finally the store shelves. Shipping rates and oil prices are costs that are incrementally built on to the final product. Oil prices have come down significantly from above $100 per barrel to the ~ $40 range as of early 2015, yet shipping prices have not come down as much yet. We hope to see in the coming quarters a reduction in shipping charges.  

3. Shelf position

 
The price charged to list items on the shelf affects the margins of coffee distributors. To make up for this, distributors tend increase their prices. Bidding wars for in-demand shelf space can jack up the end price considerably. One alternative, is to buy your buy coffee online in Singapore. To take full advantage, identify free shipping opportunities as well.