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Coffee drinkers adjust to price hike for a cup of joe

Kristine Knoll spends her afternoon at Atomic Coffee in downtown Fargo on Monday, where she bought her usual drink, an iced latte, for $5.16. With coffee prices on the rise, Knoll said she wouldn't pay over $6 for her latte. Chris Franz / The Forum

FARGO - For many coffee drinkers, the price of coffee is like the price of gasoline: It doesn't matter how high it goes - they're still going to buy it.

"Whatever the price is, that's what the price is going to be. You fill up," explained local coffee consumer Florian Weilke.

The self-proclaimed coffee addict said he drinks at least 20 espresso drinks each week, and while local prices haven't changed, he's seen it on the national level.

"I spent an awful lot of money at the airport in Minneapolis this morning for a cup of coffee, so I am under the impression that they're going up," he said.

Nationwide statistics show a significant increase in coffee prices.

According to U.S. Department of Labor statistics, a 1-pound can of ground coffee sold for an average of $5.10 in April, up from $3.64 the year before.

Hit with wildly increasing costs for beans from growers, coffee roasters are charging more to supermarkets and other retailers as a result.

J.M. Smucker Co., which distributes the Folgers and Dunkin' Donuts coffee sold at stores, said last week it was hiking prices for a pound by 11 percent - the company's fourth and biggest increase in a year.

A few days later, Starbucks - which had already raised prices on some coffee drinks in the fall - said it would raise prices for bags of coffee beans sold at its cafes by 17 percent.

Over the past 12 months, the price of green, unroasted coffee on the big commodities exchanges has gone up nearly 92 percent.

"These are big increases - and I don't think we're done with it," said food industry expert Phil Lempert, who edits the blog "We're going to see higher prices on coffee for a very, very long time."

Spurring the run-up in bean prices is a combination of bad weather in coffee-growing regions, increased demand from developing countries such as China and intense speculation in the commodities markets, experts said.

But for most coffee drinkers, the price would have to go up substantially before a change would be made.

"It will not impede an addict," Weilke said.

Out of more than 400 surveyed in an survey Monday, 55 percent said coffee prices would affect them, while 44 percent said it wouldn't.

Kelly Soensken of Fergus Falls, Minn., said she hadn't noticed increasing prices, but would change her habits if prices got too high.

"For a regular blend, I wouldn't pay more than $2 or $3," Soensken said.

Local coffee shop owners differ on their approach to rising costs.

Joel Onsurez, owner of Babb's Coffee House, said his company has seen a 3 to 5 percent increase in the past few months.

"We're going to hold off as long as we can, and we've been trying to do that for the customer because I know there's going to be a point where everyone's going to be like, 'Enough's enough,' " Onsurez said.

The coffee house owner said if costs don't go down, they'll probably raise prices by the end of the summer.

"While we haven't increased our prices too much, a lot of people have felt the pinch as far as the economy goes in general; people are just tightening their belts," he said.

For Joe Curry and Erik Meyer, co-owners of The Red Raven Espresso Parlor, increasing costs are just something they hear about on the news.

"The quantities we get are small enough and the company we buy through is small enough that the trickle-down effect doesn't really hit us too hard," Curry said.

The co-owner said prices haven't increased as much for them because they get their coffee through Raven's Brew Coffee, a company that buys their beans from small farming co-ops in South America.

"It's small groupings of farmers trying to create that sustainable lifestyle for themselves, so they're not really under the pressure of a large market," Curry said." I think because they are buying small quantities from small farmers, that price doesn't fluctuate as much compared to people who are buying shiploads."

In most cases, if coffee goes up 4 or 5 cents, Curry said the business "will just eat that cost." Either way, the co-owner said customers will stay.

"They're willing to give that extra 10 cents to a business so they can buy from a trustworthy source," he said. "If we do have to raise the prices, they won't blink an eye, because they know the quality."

While there's no knowing how high prices will go, most coffee drinkers and shop owners say it won't matter.

"For some people, coffee is an addiction. People will always search out that fix," Curry said. "So, I don't think it'll affect the individual consumer as much."