36 yuan/kg, coffee futures reached a 10-year high Starbucks rose, Ruixing rose, TIMS rose...
How big of a pot does it take to sell coffee for 40 yuan a cup of futures
February 19, 2022 Chengdu Commercial Daily Electronic Edition
roar
Starbucks' large mocha has been raised from 35 yuan/cup to 36 yuan/cup, and the extra-large oatmeal velvet latte has risen from 41 yuan/cup to 42 yuan/cup.
The customer service of Ruixing Coffee said that in December last year, the prices of delivered drinks and self-pickup drinks in hundreds of stores were increased by about 3 yuan on the basis of the original price.
A consumer in Tianjin said that she bought Tims' "Double Double Dark Roast" coffee in January this year. It was 18 yuan per cup at the time, but now it has risen to 19 yuan per cup.
Are beans expensive?
Calculated on the basis that each cup of coffee requires 10 grams of coffee beans, from January 2020 to the present, the price of C-type coffee futures in the United States has risen from about 15.33 yuan/kg to about 34.83 yuan/kg, and the cost per cup of coffee has risen approximately 0.195 yuan.
"Some of them go up by 3 yuan per cup. Obviously, the raw materials can't go up that much. It may be that these companies have their own considerations."
■ Starbucks (SBUX.US) rose, and Luckin rose after Starbucks rose; Luckin rose, and Luckin rose after TIMS rose.
■ Since late February, many chain coffee shops have been exposed to rising prices of coffee drinks, ranging from 1-3 yuan.
■ The Red Star Capital Bureau has learned that the trading price of small-grain coffee around the world will be priced with reference to a futures.
Since January 2021, the futures have more than doubled, from about 15.33 yuan/kg to 34.83 yuan/kg.
■ Correspondingly, prices are rising from the production end of coffee beans to the end of coffee beverages.
■ A coffee trader from Yunnan Province told the Red Star Capital Bureau that last year, their purchase price from coffee farmers was as high as 22 yuan/kg, and this year's purchase price is about 30 yuan/kg.
Many chain coffee price increase customer service said it was based on cost considerations
Following the # Starbucks price increase # on the Weibo hot search list, the topic # Ruixing Tims Coffee also increased the price # followed closely.
According to a previous report by the Red Star Capital Bureau, the prices of many Starbucks drinks have been raised. For example, the large cup of mocha has been raised from 35 yuan/cup to 36 yuan/cup, and the super-sized oatmeal velvet latte has risen from 41 yuan/cup to 42 yuan/cup /Cup.
It is worth mentioning that this is the second time Starbucks has raised prices in 4 months. As early as October 2021, Starbucks raised prices once, but mainly for food.
The topic #Starbucks Raises Prices 2 Times in 4 Months# also made it to the hot search list on Weibo.
Similarly, some consumers found that Luckin Coffee and Tims Coffee have also raised the prices of some beverages recently.
According to the Shanghai Securities News, the customer service of Ruixing Coffee said that according to the company's decision, in December last year, the prices of delivered drinks and self-pickup drinks in hundreds of stores were increased by about 3 yuan on the basis of the original price.
A consumer from Tianjin told the Red Star Capital Bureau that she bought Tims' "Double Double Deep Roast" coffee in January this year. The price at that time was 18 yuan per cup, but the current price has risen to 19 yuan /Cup.
On February 17, the Red Star Capital Bureau consulted the customer service of Starbucks, Ruixing Coffee, and Tims respectively. All three customer service representatives said that the price increase was decided after comprehensive consideration of operating costs/market operations, etc. The following are their specific details. Reply:
Starbucks customer service: Our pricing is determined after comprehensive evaluation and consideration of various factors such as operating costs.
This time, only the pricing of some beverages and food has been adjusted.
All packaged coffee beans, coffee cups and other peripheral products are not included in this price adjustment.
Luckin Coffee's customer service: This price adjustment is a normal operating policy adjustment.
For the two different consumption scenarios of delivery and self-pickup, the company comprehensively considered factors such as production and operation, manpower, rent, distribution, etc., and made certain adjustments to the delivery price.
Tims' customer service: After comprehensively considering the current market operation, we have adjusted the prices of a small number of products.
Coffee futures hit 10-year high
The raw material of each cup of coffee has risen by less than two cents
Before the official explanations from the major coffee chain brands, there was a market view that it was the rise in the price of coffee futures that caused the cost to rise sharply.
"The transaction price of small-grain coffee in the world will be priced with reference to the US C-type coffee futures (KC. NYB)." Hu Lu, deputy secretary-general of the Asian Coffee Association and vice president of the Yunnan Coffee Industry Association, told Red Star Capital Bureau.
(Note: This futures is traded on the Intercontinental Exchange in the United States. The English abbreviation of the exchange is ICE. Some domestic securities information platforms translate the name of the futures as "ICE coffee futures". coffee futures".)
The Red Star Capital Bureau noticed that since January 2020, the price of C-type coffee futures in the United States has continued to rise, from about 110 cents/pound (about 15.33 yuan/kg) to over 250 cents/pound (about 34.83 cents). Yuan/kg), more than doubled.
Recently, the price of this futures once reached a 10-year historical high - 260.45 cents / pound, or about 36.23 yuan / kg.
However, Hu Lu believes that the price increase of coffee futures is not the only reason for these brands to raise the price of end products.
"For the stores of chain coffee brands, the cost of coffee raw materials does not account for a particularly large proportion. If it is a company without strong brand competitiveness, it chooses not to increase prices, although profits will be reduced, but it will not affect the company's business. Survive." Hu Lu said.
Calculated on the basis that each cup of coffee requires 10 grams of coffee beans, from January 2020 to the present, the price of C-type coffee futures in the United States has risen from about 15.33 yuan/kg to about 34.83 yuan/kg, and the cost per cup of coffee has risen approximately 0.195 yuan.
"Some of them will increase by 3 yuan per cup. Obviously, the raw materials will not increase that much. It may be that these companies have their own considerations. Because there are more and more coffee shops in China now, it is more and more difficult for companies to want to dominate. As the revenue of the store decreases, it may only be possible to increase the price of a single cup to stabilize the revenue of the store and make it the same as the same period of previous years." Hu Lu told the Red Star Capital Bureau.
For example, Starbucks’ financial report shows that in the first quarter of fiscal year 2022 (2021.10.04-2022.01.02), as Starbucks’ second largest market, same-store sales in the Chinese market fell by 14%, the average customer unit price fell by 9%, and the transaction volume down 6%.
Purchase price of coffee beans rose 36%
Traders reduce purchases due to production and other reasons
According to Jiemian reports, Yunnan Province produces nearly 100,000 to 140,000 tons of coffee beans each year, accounting for 99% of the national output.
Li Hua (pseudonym) is from Baoshan City, Yunnan Province. He is a coffee bean trader. He buys fresh coffee fruits from coffee farmers. After screening, picking and other processes, he sells them to Starbucks, Nestle, or exported to European countries.
Since the price of coffee beans is tied to the C-type coffee futures in the United States, what Li Hua does most often is to keep an eye on the futures price, "basically every day, and at night."
The Red Star Capital Bureau has learned that the picking period of fresh coffee fruits is generally from December every year to February and March of the following year, and the picking period in some high-altitude areas will be extended to April.
That is to say, it is now in the picking season of fresh coffee fruit.
The "2019 Yunnan Coffee Industry Development Report" by the Yunnan Coffee Industry Association pointed out that the cost of coffee beans produced in Yunnan is about 15 yuan/kg.
"The price this year has indeed risen a lot." Li Hua told the Red Star Capital Bureau that last year, the highest purchase price they purchased from coffee farmers was 22 yuan/kg, and this year's purchase price was about 30 yuan/kg, which is higher than last year. up 36%.
On the one hand, Li Hua supplies coffee beans to European countries. "They all think that our Yunnan coffee beans are very good. The price of our foreign trade orders generally follows the futures price, and we can sign a contract to lock it at a certain price."
On the other hand, Li Hua's company also supplies coffee beans to Starbucks (referring to Pu'er Starbucks Aini Coffee Co., Ltd.) and Nestle.
On February 17, Li Hua provided the Red Star Capital Bureau with a list of the reference prices of Starbucks and Nestle that day.
Taking Nestle as an example, it divides coffee beans into three grades, namely Nespresso grade, 1.1 grade, and 1.2 grade. The purchase price is 36.7 yuan/kg, 34.6 yuan/kg, and 33.5 yuan/kg.
"The quality of Nestle's Nespresso is better. The cupping performance of 1.1 is better than that of 1.2. It is mainly based on the results of the cupping." Li Hua told the Red Star Capital Bureau that they will also conduct cupping when purchasing from coffee farmers. Every bag of coffee beans is sampled and cupped.
Starbucks divides coffee beans into two types, shell beans and coffee rice. The former is 24.18 yuan/kg and the latter is 31 yuan/kg.
However, Li Hua also told the Red Star Capital Bureau that the amount of coffee beans purchased this year is not as much as last year. "Last year (referring to the last picking period), we purchased nearly 300 tons, and this year, we have only collected a little more than 100 tons."
"On the one hand, there are more people harvesting coffee beans this year, and on the other hand, the output may have decreased. Some coffee farmers reported that this year was not very fruitful, which may be affected by natural conditions such as rain." Li Hua said.
News Watch
The industry is in a price hike cycle
The next stage may stabilize
An observer of the coffee industry told the Red Star Capital Bureau that according to her observation, the cycle of the coffee industry is about ten years, and the price increases last year and this year are normal in the cycle, after which the price will stabilize.
The Red Star Capital Bureau noticed that the last time the U.S. C-type coffee futures had a record high was in May 2011, when the price once exceeded 300 cents per pound, or about 41.78 yuan per kilogram.
As of press time, the price of C-type coffee futures in the United States is 250.45 cents per pound, or about 34.89 yuan per kilogram.
Hu Lu believes that there are two reasons for the rise in futures prices this time.
First, the relationship between supply and demand has changed, and second, the liquidity of commodities has weakened under the influence of the global epidemic.
"Coffee consumption in many countries has grown rapidly, especially represented by China. With the increasing consumption rate, the global total output has not increased by a corresponding degree, which will inevitably lead to a shortage of supply." Hu Lu told Red Star Capital Bureau Say.
In terms of the liquidity of commodities, Hu Lu believes that under the influence of the global epidemic, the circulation of coffee producing countries and coffee consuming countries is not smooth, and each batch of coffee products must be inspected, quarantined, and transported. The labor cost and time cost are relatively high.
"Supply exceeds demand and circulation costs increase. Under such circumstances, futures prices have become inevitable." Hu Lu said.
The Red Star Capital Bureau noticed that when the price of coffee beans and futures prices are strongly correlated, when the price is at a low period, it will also directly affect the domestic coffee industry.
The aforementioned coffee industry observer layer Gao told the Red Star Capital Bureau that from the relevant data, the coffee planting area in Yunnan has been shrinking before.
"There is no way, coffee farmers have to survive, they are all making money and planting."
The "2019 Yunnan Coffee Industry Development Report" pointed out that since 2005, the national coffee planting area has increased year by year, and the planting scale reached the largest in 2014, and then showed a downward trend until 2018.
Li Hua told the Red Star Capital Bureau that when the coffee industry was not doing well, "(some farmers) dug up the coffee and planted mangoes instead."
So, is it possible for China to establish its own price system for coffee products?
"From the current situation, it is difficult. We made efforts 10 years ago to establish the Yunnan Coffee Trading Center and the Chongqing Coffee Trading Center. After several years, they have not really grown up." According to Hu Lu , At present, there is a Xinhua·Yunnan (Pu'er) coffee price index in China, but some elements are still determined with reference to the C-type coffee futures in the United States.
Chengdu Business Daily-Red Star News reporter Yang Peiwen