Starbucks Capsules Also See Price Hike... Will In-Store Prices Rise Too?

Screenshot of Nestl? Korea's 'Nescaf? Dolce Gusto' promotional video.

[Asia Economy Reporter Moon Hyewon] As coffee shops are weighing whether to raise prices due to the increase in coffee bean prices, capsule coffee prices will rise starting from the first day of the new year.

According to the industry on the 31st, Nestl? Korea will raise capsule coffee prices by an average of 10% from January 1. Nestl? Korea operates capsule coffee brands such as Nescaf? Dolce Gusto and Starbucks At Home. Following the price adjustment, the price of Starbucks capsules sold through the coffee subscription service 'Capsule To Door' and the online exclusive mall will increase from 7,900 won to 8,700 won. Prices of about 30 types of Starbucks coffee beans sold through domestic distribution channels by Nestl? Korea will also increase by 10%.

The increase in capsule coffee and coffee bean prices is due to poor crop conditions. Nestl? Korea explained that irregular rainfall and subsequent drought damage in Brazil, the world's largest coffee bean producer, have reduced coffee bean production, causing global coffee prices to soar. In addition, Vietnam, the world's second-largest coffee bean producer, is also facing difficulties in coffee bean production and export due to logistics paralysis caused by strict lockdown measures in major cities amid the COVID-19 pandemic.

Nestl? Korea uses the same Arabica coffee beans as Starbucks stores worldwide. Among these, capsule coffee is jointly developed by Nestl? headquarters and Starbucks in the United States. Industry insiders predict that the price increase of Nestl? Korea's capsules and coffee beans is likely to lead to a price increase for coffee in stores. In its annual report announced last October, Starbucks in the U.S. stated, "The ongoing drought in Brazil is expected to affect coffee prices," and "Arabica coffee beans could have a significant adverse impact on our profitability." Regarding this, a Starbucks Korea official said, "We are reviewing various possibilities but nothing has been decided yet." Starbucks has maintained the Americano price at 4,100 won since it raised it by 200 won from 3,900 won in 2014.

A Nestl? Korea official said, "Due to the rise in international coffee bean prices and material costs, we had to increase product prices," adding, "However, this is unrelated to domestic cafe operations." According to the International Coffee Organization (ICO), the average coffee price last month was 195.17 cents per pound, marking the highest level in the past 10 years.

This content was produced with the assistance of AI translation services.