«Un tsunami!» The weather report, compiled by Giuseppe Lavazza, vice-president of the Italian roaster that bears his name, is rather gloomy. Notice of black grain on coffee… The sector first took the full brunt of the crisis linked to Covid-19, with a complete upheaval in consumption habits. No more blackouts at the counter or the break in front of the coffee machine. Make way for the homemade beverage. Even if, finally, despite disturbed flows, the coffee continued to flow.
New blow from Trafalgar, in the spring of 2021. Black frost is falling on Brazilian coffee plantations. A phenomenon that usually occurs every ten years. The production of the world’s leading producer and exporter, also affected by the drought, fell by 24% compared to the record harvest of 2020. This grain harvest in “ristretto” mode has caused world prices to ignite over the months . At the beginning of December 2021, the price of arabica, the most popular variety, reached the bar of 2.50 dollars (2.24 euros) per pound. A ten-year high. “When you have a 100% price increase, it’s a tsunami”worries Mr. Lavazza.
“Unprecedented inflation”
New episode of the black series for coffee, at the end of February, with the invasion of Ukraine by the Russian troops of Vladimir Putin. The prices of energy, packaging, transport, fertilizers have soared, tensions over supplies have hardened. What put the roasters under pressure. “We have revised our budget six times. This very rapid inflation is unprecedented in the history of the company”, testifies Mr. Lavazza, who refuses to make any forecasts for the year, even if the turnover of the Turin family company should reach a record level, higher than the 2.3 billion euros reached in 2021, at the end of the year. following the 11% rebound in activity, after the air hole linked to Covid-19. But Margin could drink the cup.
The upturn is not yet in sight. “Although good production volumes are expected this year in Brazil, with coffee plants having recovered well from the 2021 frost episode, this will not be enough to rebuild stocks. Prices will remain high, especially as producers are affected by the rise in fertilizer prices »analyzes Mr. Lavazza, who anticipates the persistence of dark clouds on the coffee market, until 2023. Currently, the pound of arabica is trading at 2.26 dollars on the New York Stock Exchange.
Unsurprisingly, through a game of communicating vessels, the consumer will toast. Between pasta, oil, flour, burgers, butter, chicken and semolina, coffee slips into the basket of food products whose prices have risen the most in supermarkets. Lavazza, owner of the Carte Noire brand in France, expects an increase of between 8% and 10% on the shelves this year. It remains to be seen whether customers will extend the change to continue drinking their favorite coffee…