Coalition of Franchisee Associations

May 11, 2009

Coffee War Bullets Just Got a Lot More Expensive

More detail on coffee and sugar costs...

"The amount of coffee stored at
warehouses earlier this month
dropped 18% from the highs of
last fall, according to an account
from Bloomberg. Meanwhile, crop yields have been
relatively puny: output in Columbia and Costa Rica
may have dropped as much as 30%. Commodities traders
said prices could climb another 40% before the end
of this year."

Barron's Reports



Anonymous said...

Most of the sales projections for McOpCo and Franchisees in 2009 are based on menu price increases and the consumer trading down from higher priced restaurants, such as Denny's, IHOP, Applebees, etc. McCafe will continue to lag below expectations even with the massive ad budget.

Anonymous said...

The coffee supply situation
reminds one of tomatoes.
It seems like every time we've
done a major push
on a lettuce and tomato
sandwich we do it at the same
time tomato supply is down (weather)
and prices are spiking.

Then of course the demand
from the mcd system makes
it worse.