Coffee Prices Headed Higher

Gasoline isn't the only necessity of life that's more expensive than it used to be. The price of coffee is also going up.

Food giant J. M. Smucker, which owns the Folger's and Dunkin' Donut coffee brands, says it is raising the price on most of its coffee brands by an average of 11 percent.

The company points to what it calls “sustained increases in green coffee costs.” Smucker says it needs to be able to pass along some of those higher costs to the consumer. Complicating matters, say analysts, is the fact that coffee demand is running ahead of supply.

Demand is rising, not just in the U.S., but also in India, China and Brazil. Droughts and other weather-related problems in coffee-growing regions have cut into supplies.

Other coffee vendors, notably Starbucks, have also raised prices in the last year.

In recent years, food manufacturers have dealt with rising costs by keeping the price the same but reducing the size of the product package. For example a 12 ounce can of coffee might now be 10.8 ounces.

Coffee is among the world's most popular beverages with industry estimates of more than 400 billion cups consumed each year. The major coffee growing regions of the world are Africa, the Arabian Peninsula, Central and South America, Indonesia and New Guinea.