The cost of arabica beans are up almost 20% on the prices they were a year ago and while they are not quite at their peak pricing of 2022, we know that wholesale prices are consistently on the up. So, how can businesses protect themselves from ever-rising arabic bean prices while still serving their customers great coffee?
Why are arabica bean prices going up?
Firstly, climate change is impacting the harvest in the key coffee growing regions. Countries around the equator, where most coffee beans are grown, are facing increasing lower rainfall. This means that the conditions needed to grow the beans are becoming more unpredictable each year.
While the price of robusta coffee isn’t linked to the price of arabica, that too is rising due to weather events in places like Vietnam where robusta is grown. The price of robusta can be an indicator of what may happen with arabica.
As climate change impacts the harvest, the demand for coffee has increased exponentially. The higher demand, coupled with decreasing stocks means arabica bean prices are going up.
For those who buy wholesale, this can mean yet another squeeze on the business. For the end customer, it’s part of a wider increasing cost of living. So how can businesses balance giving great quality coffee with also staying competitive?
Small versus large wholesale coffee suppliers
Common thinking would be that buying from a big supplier would help a business weather the rising costs of arabica beans. The large wholesale companies can buy in bulk and drive down the prices.
Yet, this isn’t giving wholesale customers the real picture. Often, the larger the operation the more stages there are in the supply chain. This means everyone along the way needs to take their cut. So when prices are fluctuating, it can mean the farmer and end business get a bit of a raw deal.
The larger wholesale suppliers also work best in bulk. They buy lots but profit-margins will be tighter so are more exposed to price changes. If you’re a bit national chain, this works well for you. You can also buy in bulk and get a better deal.
If you’re a small, independent hospitality business, you won’t be getting the best deal.
Benefits of independent wholesale suppliers
Instead, look at shortening that supply chain. The fewer people there are taking a cut, the better the supply chain is protected from price changes.
Souter Bros, for example, has a direct relationship with all the farms which supply our beans. This means we are better protected from international price changes. The supply chain is short for our wholesale customers, which means independent businesses can get a better price, even when buying in small amounts.
It also means that our farmers get a fairer deal. They can invest more into the land and better protect their farms from the impacts of climate change.
As a business, we can be sure of the farms ethical and sustainable practices which means we are not further contributing to climate change.
While we can’t promise we will never be affected by the international price rises of arabica beans, we are putting as much in place as we can to protect our customers - both wholesale and retail - from these changes.
Quality wholesale coffee
One of the ways we’re looking at protecting our customers from arabica bean price rises is to expand our offer of coffee bean sources. We’ll be launching new single-origin and blends later this year but we’ve been out doing the hard work of tasting all the coffee first to find the right suppliers.
See what that looks like below:
Cost of coffee for the customer
You might have seen news reports earlier this year about the cost of coffee in hospitals. We’re in a bit of a unique position as we have a hospital outlet. By working closely with our suppliers, we’re able to offer drinks at our usual price point, regardless of where we’re based.
We know that running a coffee shop takes a lot of hard work and effort. We also know that your customer base wants good quality coffee at the best price. By taking a different approach to wholesale coffee, we can make a positive change for our farm-partners and our customers.
Wholesale speciality coffee
Come and have a chat with us about how we can supply your business with our wholesale speciality coffee beans.