Falling Coffee Prices Perk Up Consumers

Grocers across the country started cutting retail coffee prices this week in reaction to an earlier rollback in wholesale prices announced by manufacturers. Prices have been falling on the world market because of improved supplies and the prospect of a bumper Brazilian harvest next year. The price of unprocessed green coffee on commodity markets closed at $1.57 a pound Friday, compared with $2.23 a pound in May and a peak of $3.44 in July 1994. Cincinnati-based Procter & Gamble Co. on Monday cut the U.S. list price of a 13-ounce can of Folgers--the nation’s best-selling coffee--by 30 cents. That dropped the list price--what manufacturers charge stores--of regular ground Folgers to $2.76. Tarrytown, N.Y.-based Kraft Foods, maker of the competing Maxwell House and Yuban brands, also announced a 30-cent decrease, said spokesman Pat Riso. But consumers probably won’t see any price breaks at restaurants and specialty stores such as Starbucks, which has 1,400 stores in the U.S. and Canada. “We always have to look at coffee prices in the longer run,” said Starbucks spokesman Chris Gimbl. “At this time, we don’t have plans to change prices.” The price drop in some grocery stores might be gradual, partly because the stock now on the shelves could have been bought at a higher price and partly because of competition among stores.