From Hamburgers to Coffee... New Year Food Prices Rising One After Another

[Asia Economy Reporter Seungjin Lee] Following last year, food prices continue to rise in the new year of the Year of the Black Tiger. After Starbucks decided to raise prices for the first time in 7 years and 4 months, Dongseo Food, Maxim, and Kanu are also increasing their prices. Additionally, Burger King is raising prices, continuing the trend of rising dining-out costs.

According to the food industry on the 8th, Starbucks will adjust the prices of 46 beverages, including Cafe Americano and Cafe Latte, out of the 53 currently sold drinks by 100 to 400 KRW each starting from the 13th. This is the first price increase in 7 years and 6 months since July 2014.

With this increase, 23 beverages such as Cafe Americano, Cafe Latte, and Cappuccino will go up by 400 KRW. Drinks like Caramel Macchiato, Starbucks Dolce Latte, and Double Shot (15 types) will increase by 300 KRW, some Frappuccino varieties (7 types) by 200 KRW, and Dolce Black Milk Tea (1 type) by 100 KRW.

The beverages with the largest price hikes at Starbucks are the most popular products, so consumers are expected to feel a greater impact from the price increase. For a tall size, Cafe Americano will be adjusted from 4,100 KRW to 4,500 KRW, and Cafe Latte from 4,600 KRW to 5,000 KRW, making the prices of signature drinks hover around 5,000 KRW.

A Starbucks representative said, "Over the past 7 years and 6 months, we have comprehensively reviewed various factors such as operating costs and economic indicators and reflected them in our pricing policy. There have been price increase factors every year," adding, "We have internally absorbed these through store operation efficiency and direct and indirect cost reductions until now."

Attention is also focused on whether Starbucks' price increase will lead to a domino effect among coffee specialty stores. When Starbucks raised prices in 2014, major coffee shops like Coffee Bean and Caffe Bene followed suit. At that time, the price of an Americano, which was in the high 3,000 KRW range, exceeded 4,000 KRW due to the price hike.

A coffee industry insider explained, "Recently, international coffee bean prices have nearly doubled, increasing cost burdens, and with the new year's minimum wage hike, pressure to raise prices has grown. Since Starbucks, a representative of the industry, has raised prices, price increases at major coffee specialty stores are expected."

Burger King Whopper

The prices of Maxim, the iconic mix coffee, and Kanu, the instant coffee bean product, are also rising. Dongseo Food will increase the wholesale prices of coffee products by an average of 7.3% starting from the 14th. This coffee price increase is the first in 8 years since July 2014. Prices of cereal products such as Corn Flakes will also rise by an average of 9.8%.

Accordingly, the Maxim Original 170g refill product will increase from 5,680 KRW to 6,090 KRW (7.2%), Maxim Mocha Gold Coffee Mix 1.2kg product from 11,310 KRW to 12,140 KRW (7.3%), and Maxim Kanu Americano 90g product from 14,650 KRW to 15,720 KRW (7.3%) in wholesale prices.

Dongseo Food cited the rise in major raw material prices as the reason for the price increase. In fact, the international price of Arabica coffee beans soared from 113 cents per pound in 2020 to 230 cents in December 2021, a 103.5% increase. Palm oil, used as an ingredient in coffee mix, rose 54.8%, and sugar increased 16.7% during the same period.

Following Lotteria and No Brand Burger's price hikes last month, Burger King has also joined the price increase trend. Starting from the 7th, Burger King will raise prices of 33 products, including 25 types of burgers, by an average of 2.9%. The price of the flagship Whopper will increase from 6,100 KRW to 6,400 KRW, Whopper Junior from 4,300 KRW to 4,400 KRW, and regular-sized French fries from 1,700 KRW to 1,800 KRW.

Earlier, Lotteria raised product prices by an average of about 4.1% starting December 1, 2021. The prices of signature items like Bulgogi Burger and Shrimp Burger single items increased from 3,900 KRW to 4,100 KRW, and set prices rose from 5,900 KRW to 6,200 KRW. No Brand Burger also joined the price increase trend, raising prices on some menu items from December 28 last year. The average price increase rate for those products was 2.8%.

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