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The Costly Coffee Shipping Situation

U.S. coffee processors are going stir crazy eyeing their cash flow these days.

What’s brewing: Skyrocketing shipping costs are forcing the caffeine connoisseurs to eat the influx or consider raising prices.

While small to mid-sized roasters feel the brunt of the hike, the big dogs aren’t immune either. Peet’s and JM Smucker Co – the owner of Folgers and Dunkin – are feeling the pinch, too.

Inflation issues: Freight across all commodities added $10 billion to costs in Q4 of 2020. For coffee, that meant prices spiked to their highest in a year, with upcoming summer and fall contracts already up an additional 15%.

All in all, getting coffee to consumers is currently more expensive than at any point in the past 5-10 years.

Where this goes: Delays are already expected for roasters waiting on coffee from Africa and South America. In other words, don’t be surprised if coffee prices creep up in 2021.