Re: Maybe longer than you think
Joey Naddeo
3/28/2012 5:47:55 PM
I've seen some absurd prices on single cup coffee makers and the accompanying serving-sized packets of ground coffee.
There is probably some sort of correlation between alcohol consumption and coffee: as the former has declined, the later has climbed. And as coffee has gained cachet, the coffee related accessories have multiplied.
Re: Maybe longer than you think
AskAsa
3/28/2012 1:09:03 PM
Above and beyond the usual french press or cappuccino makers I've noticed a variety of stylish and expensive coffee brewing machines hitting the market. Check out the corner of your well stocked starbucks and you'll see coffee culture in full bloom.
Every consumer of a coffee machine probably translates into at least a half dozen drinkers of expensive, exotic coffees.
Re: Maybe longer than you think
Street Smart
3/28/2012 12:55:43 PM
I'm with you, @Noreen...coffee is a necessity in my life, not a discretionary expense! And I actually drink mostly decaf so it's not really the caffeine factor but rather the taste...and SMELL!
I've seen prices at Costco and Trader Joe's steadily climbing but not so much in coffee bars. I'll bet that's because labor is a bigger component of their sky high prices. Their margins may be getting squeezed a bit but not yet so much that we're seeing a price increase. Sounds like that won't last, though!
@Phoenix,
India's coffee consumption has doubled in the past decade, and Starbucks just announced a plan to open stores in India by the end of the year. Vinay Gopinath, head of marketing and sales for the Coffee Bean and Tea Leaf franchises in India, a California-based chain that opened its first store in India in 2008, notes Increased exposure to foreign brands, like Starbucks or Lavazza, through travel, movies and the Internet has helped make the whole cafe culture hip for young Indians, who had more money to spend as India's economy has boomed.
Some reports describe the beverage itself as incident. Rather, the coffee shops are described a good places for young men and women to hang out, since having a beer with friends at a bar is still discouraged in many parts of the country, especially for women,
What do you think?
Re: Maybe longer than you think
Phoenix
3/28/2012 12:03:35 PM
It was interesting to read that there is an increase in demand for coffee in emerging markets such as India. Coffee is very addictive so once you start drinking it you will continue to crave it. I wonder whether this will mean that the demand will steadily increase for coffee.
There are also some coffee ETN/ETFs with great symbols like JO and CAFE.
Coffee may definitely be an opportunity in the next six months but I would wait a little longer as this vicious decline plays out.
tokyogai,
Looking at the chart it appears to me that the market may have already priced in.
I will look into it, but a year or so ago a huge commodity trader made a play to corner the coffee market. They contributed to the price spike. But as will all attempts like that, eventually the player has to unload and the trade unwinds.
Wanna bet we get more mocha ice cream, coffee flavored candy, chocolate covered coffee beans, coffee scented chocolate, coffee/soft drink hybrids, and on and on ... before we we retail prices fall?
Interestingly, if you look at the chart, the prices have spiked up and down, but by and large they have stayed relatively close to the center line. Compare that with a commodity like nat gas, which has seen huge price declines on increased supplies.
Maybe longer than you think
tokyogai
3/28/2012 10:10:05 AM
I read an article last week that pointed out that the storage facilities for coffee are almost full as growers held out last year for even higher prices. This has caused a problem as this year's crop is much larger than originally forecast. Some experts are predicting a glut for the next few years and lower prices as a result. I guess we will have to wait and see what really happens- will the rise in demand use up the excess supply?
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