Originally created 11/08/97

Lower coffee prices trickling down to consumers

CINCINNATI -- The price for a cup of hot joe is cooling off -- at least for the homebrewed stuff.

Grocers across the country started cutting retail coffee prices this week in reaction to an earlier rollback in wholesale prices announced by manufacturers.

That's making the price for a cup of coffee easier to swallow, although retailers aren't tipping their hands on exactly how far they will cut prices.

"I've got to have my coffee, but I'll take lower prices," said Mark McLeod as he plucked a can of Folgers off the shelf Friday at a Kroger store in Covington, Ky. "There was a time last year when I thought I was going to have to take out a second mortgage to buy the stuff."

Prices have been falling on the world market due to improved supplies and the prospect of a bumper Brazilian harvest next year.

The price of unprocessed green coffee on commodity markets closed at $1.50 a pound Friday, compared to the 11-year high of $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, and decaffeinated ground Folgers to $3.46.

Kraft Foods, of Tarrytown N.Y., 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 Seattle-based Starbucks, which has 1,400 stores in the United States and Canada.

"We always have to look at coffee prices in the longer run," said spokesman Chris Gimbl. "At this time, we don't have plans to change prices."

A 12-oz. cup of regular drip coffee at Starbucks ranges from $1.15 to $1.40, depending on location, he said. Those prices have been stable since May.

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 due to competition among stores.

"We base prices on a competitive situation," said Paul Bernish, spokesman for the Cincinnati-base Kroger Co., the nation's largest supermarket chain.

He declined to say how much Krogers might lower its prices.


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