Coffee prices surge, supermarkets and suppliers clash over costs
Coffee prices have risen sharply in recent months, sparking a dispute between Dutch supermarkets and JDE Peet’s, the parent company of coffee brand Douwe Egberts. Many supermarkets have stopped stocking the company’s products as negotiations stall over who should bear the brunt of soaring costs.
As of now, the global market price for a kilogram of arabica beans stands at approximately 8.50 euros. Over the past year, the price of this widely used coffee variety has more than doubled. However, consumers have yet to feel the full impact, as supermarkets are still selling coffee purchased at last year’s lower prices.
The surge in coffee prices is attributed to multiple factors. Brazil, one of the world’s largest coffee producers, has experienced severe weather conditions linked to climate change, leading to a significant drop in crop yields.
At the same time, global demand for coffee has grown substantially. In Asia, where tea has traditionally been the beverage of choice, coffee consumption has risen dramatically in recent years. Starbucks, for instance, has expanded rapidly in China, opening around 800 new stores annually. Today, over a third of its locations are in major Chinese cities such as Beijing and Shanghai.
Negotiations between JDE Peet’s and Dutch supermarkets are centered on setting coffee prices for the coming year. Coffee is considered a staple product in Dutch households, and retailers are reluctant to pass significant price hikes on to consumers.
“Large price increases need to be justifiable to customers,” said Michiel Muller, founder of online supermarket Picnic. “Prices have already risen substantially in recent years, and now we are seeing proposals for increases of 20 to 30 percent. That is unacceptable to us.”
Other supermarkets have also reported empty coffee shelves, confirming that they have yet to reach an agreement with JDE Peet’s.
The company itself has provided little information about the ongoing negotiations. “Annual discussions with retailers are complex, with pricing being an important factor but not the only one,” a JDE Peet’s spokesperson said. “Retailers determine the price consumers pay in stores. It is unfortunate that many coffee drinkers currently cannot find their favorite products in some supermarkets.”
Supermarkets and coffee brands are not the only stakeholders in the supply chain. Farmers, processors, and intermediaries all play a role, raising the question of where the additional costs ultimately land.
Coffee farmers see little benefit from the price hikes, according to Bregje Deben of the Koffieschool. “A farmer might receive slightly more for their beans, but the majority of the money stays with large coffee companies,” she said. “About 20 percent of the price we pay for coffee goes to the producing countries, while 80 percent remains in consumer markets.”
Some specialty coffee shops have taken steps to address this imbalance by purchasing directly from farmers. Guido van Staveren, founder of Moyee Coffee, advocates for a fairer distribution model.
“We know each individual farmer through full digital tracking. We buy coffee directly from them, roast it in the country of origin, and then sell it to consumers here,” Van Staveren said. “We work with 12,000 farmers, which could easily supply ten major supermarket chains like Albert Heijn.”
