Coffee prices are on the rise. The global coffee giant JDE wanted to impose a steep increase on one of the main French retail chains that refused it. We explain to you this battle of coffee.
If you are shopping at Intermarché, you may not have found your favorite coffee in recent days. The coffee giant JDE (Grandma, l’Or, Jacques Vabre, Tassimo, Maxwell) has decided to stop delivering the supermarkets of the sign because of a disagreement over prices. The Musketeers took the case to court and won on February 4. Deliveries will resume from this Thursday.
At the origin of the conflict: a commercial dispute over the purchase price. Retailers and manufacturers must negotiate their prices for 2022 by February 28. Between discussions, pressures or intimidation, manufacturers want to sell their products as cheaply as possible and supermarkets buy them as cheaply as possible to be able to offer a competitive price to their customers. JDE would have liked to impose a 25% price increase, which Intermarché would not have accepted. The brand did not hesitate to explain its dispute to customers on its shelves.
“Pressure shots in the negotiation”.
“Every brand is fighting with every manufacturer to try to lower prices. There is a lot of intimidation, pressure shots in the negotiation. There is a tension until the last hour, sometimes the last minute,” explains to dispatch Rodolphe Bonnasse, retail expert at Aristid. “The trader and the industrialist have every interest in finding an agreement.
Moreover, this is not the first time that a dispute has broken out in the open between the department store and a supplier. In the past, Leclerc had dereferenced Coca-Cola, Carrefour les produits Danone or Perrier had refused Lidl’s conditions.
Coffee is getting more expensive
Whatever the brand of the large distribution, coffee will be more expensive this year. “In the coffee market, JDE’s competitors are rather making requests for a 12 to 15% increase,” said Intermarché President Vincent Bronsard in the Parisian.
The year 2021 saw a surge in coffee bean prices like the market had not experienced since 2014. In Brazil, the world’s largest coffee producer, a very rare cold snap caused damage to plantations in July and August last year. But an icy temperature inevitably leads to the death of the coffee tree. A plant takes three years to produce its first grains. Another explanation: Covid-19. The price of containers has skyrocketed to transport production from South America to Europe.
To make matters worse, coffee consumption has been growing steadily around the world for the past ten years. The global coffee market is expected to grow by 9% annually according to Starbucks. A law of supply and demand that has an impact on prices. In France, we consume 5.4 kg of coffee per year per capita. 80% of people have coffee for breakfast. Would you be willing to do without your cup of coffee in the morning?
The return of coffee beans
With the success of individual pods, popularized by Nespresso and George Clooney, coffee beans have long been marginalized. Over the past two years, sales of coffee beans have been on the rise. Sales have soared by 36% over the past twelve months, the market research firm IRI reported in November 2021. Over the same period, pod sales increased by 5.6% in France. For the same amount of grain, the coffee pod costs € 23 on average per kilo, the coffee bean 11 €, according to echo. In contrast, sales of ground coffee fell by 5% and soluble coffee by 20%.