“I like to drink ‘Maxim Coffee’ every morning, but what can I do…”

Dongseo Foods, No. 1 in the domestic instant coffee industry, increasing the prices of its coffee product line. As instant coffee joins the upward movement of coffee franchises such as Starbucks, attention is focused on the onset of ‘coffee inflation’ (coffee + inflation).

According to related industries on the 4th, Dongseo Foods will increase the prices of coffee products such as instant coffee, coffee blends, and coffee drinks by an average of 8.9% from the 15th. Dongseo Foods has nearly 90% market share in the domestic instant coffee market. This increase is the first since December 2022.

As a result, the prices of most coffee products, including Kanu and Maxim, are rising. Maxim Mocha Gold (500g refill) went from 17,450 won to 19,110 won, Maxim Mocha Gold Coffee Mix (2.16kg) went from 23,700 won to 25,950 won, and Kanu Americano (90g) went to 17,260 won Maxim price TOP (275 ml) increased from 1,290 won to 1,400 won.

Dongseo Food cited the cost burden and high exchange rate due to rising prices of raw materials such as coffee beans, sugar, and palm oil as the reasons for the price increase. The explanation is that the coffee industry, which depends on imports for all raw materials, cannot avoid the price pressure caused by the increase in exchange rates.

Photo = Yonhap News The price of the coffee beans themselves, excluding exchange rate factors, is also rising sharply. Not only high quality Arabica coffee beans but also relatively cheap Robusta coffee beans are hitting all time high prices. According to Korea Agro-fisheries and Food Trade Corporation (aT) food industry statistics, the average price of Robusta coffee beans on the London International Financial Futures Exchange (LIFFE) last month was $4,687.65 per ton, up 91.02% from previous year ($2,453.95). ). Since breaking an all-time high of $5,527 a tonne on September 26, it has been experiencing ups and downs.

Korea imports mainly Robusta from Vietnam and Arabica from Brazil. Brazil has recently experienced the worst drought and high temperatures in 70 years, and Vietnam has also been damaged by typhoons after the drought, causing a disruption in the supply of coffee beans to both countries.

Before that, the coffee franchise business raised prices one after another. Last August, Starbucks raised the prices of each drink for the Grande (473 ml) and Venti (591 ml) sizes by 300 won and 600 won, respectively. Starting from the 1st of this month, the high volume prices of 11 types of non-coffee drinks, which are part of ice drinks, have been increased by 200 won each. Low-priced coffee menu items such as The Venti and Compose Coffee increased their prices with at least 200 winners and up to 1,000 winners this year.

Jang Ji-min, Hankyung.com guest reporter [email protected]