Starbucks, one of the largest coffee chains worldwide is increasing prices on its labor-intensive and large-sized drinks. The price increase is due to the surging prices of cocoa, sugar, dairy products and raw coffee beans like Green Arabica.
One of the branches in New York increased prices upwards of twenty cents and customers are paying over $4 worth for a large mocha latte. Costs have increased in other big U.S. markets like Washington D.C. and California.
In a statement released Wednesday, the company will no longer absorb the increased prices of raw coffee and other goods. Starbucks did not rule out a price increase on packaged coffee in grocery stores from increasing costs of coffee beans.
The prices of its basic coffee and espresso drinks will not change depending on the market; this includes Starbucks’ tall brewed coffee.
Howard Schultz, Starbucks Chief Executive, stated, “Over the last six months a highly speculative green coffee market and dramatically increased commodity costs have completely altered the economic and financial picture of many players in the coffee industry.”
Starbucks competitor, Green Mountain Coffee Roasters, is also planning to increase prices an estimated ten to fifteen percent this coming October.
Coffee retailers Dunkin’ Donuts, Millstone and Folgers have also raised prices. The costs of products manufactured by J.M. Smucker Co. increased about nine percent since last August.