Prices will increase Tuesday on certain Starbucks coffee drinks and products, The Wall Street Journal reported Friday.
Changes in the cost of raw coffee have pushed a number of coffee businesses to similarly raise prices, Yahoo Finance reported.
J.M. Smucker announced earlier this month it would raise the prices of its Folgers and Dunkin’ Donut brands in supermarkets by about 9 percent, Yahoo Finance reported. Maxwell House and Yuban, owned by Kraft Food Group, jumped about 10 percent this month as well.
Raw coffee is threatened by drought in Brazil and harmful fungus, Yahoo Finance reported, but that doesn’t fully explain why Starbucks will cost more.
After coffee had exceeded $2 a pound, Starbucks CEO Howard Schultz told Fox Business in a March interview that Starbucks has “more than one year’s worth of protection on physical inventory and contracts.”
“We do not have any intention at this time to raise prices,” Schultz told Fox Business in that interview.
WSJ reported Starbucks has locked down its coffee supply for the 2014 fiscal year and part of the supply for the 2015 fiscal year.
So why are Starbucks’ prices going up?
The Associated Press cited an email from spokesperson Jim Olson, who said “competitive dynamics” and “cost structure” influenced the price change.
Prices will increase by 5 to 20 cents, WSJ reported, and Starbucks representatives said a normal coffee bill in the cafes will only go up by about 1 percent. Starbucks’ packaged coffee in grocery stores will rise in price by about $1 each bag.
The price of packaged coffee in Starbucks stores will not change, WSJ said, and the price will also stay the same for certain Starbucks drinks, such as grande-sized lattes, tall brewed coffees and Frappuccinos.
Check out a collection of tweets in reaction to the raise in Starbucks coffee prices.