Shoppers seeking a warm brew should wake up and smell the coffee.
The average retail price of coffee has fallen 1.3% year-on-year - far less than the steep correction in the commodity price - but it comes as shoppers are facing above inflation hikes in tea and other hot drink prices.
The average retail price decline (per kilogram) has been driven by a 1.7% drop in the price of branded lines. Own-label coffee, meanwhile, has risen 1.3% [BrandView.com 52w/e 5 November 2013].
Shoppers who grind their own beans are paying 1% less than a year ago, instant coffee drinkers 0.7% less and ground coffee fans 0.3% less. Caffeine-avoiders are best off, with the volume price of decaff coffee falling 3.7% year-on-year.
All the prices were for coffee skus stocked by the big four over the past 24 months.
In terms of unit prices, a 100g jar of instant has fallen 0.9% to £2.95 on average, and a 200g jar by 0.8% to £5.13. Once again, decaf drinkers come out on top in terms of savings, with 100g packs down 1.9% to £3.03, and 200g down 4.9% to £5.43.
The retail price drops come as the cost of robusta coffee has dropped 24.4% year-on-year and arabica 31% [Mintec], while promotional activity in the hot beverages aisle has increased. The number of coffee promotions in the big four has risen from 2,322 a year ago to 2,821, with the average saving rising from 23.2% to 24.6%. Tesco has been particularly active, with its share of total coffee promotions rising from 32.3% to 38.7% year-on-year.
Promotional activity on tea lines has increased even more than that on coffee - from 1,749 to 2,521, while the typical saving is up from 24.5% to 25.7% - but this hasn’t prevented retail price rises. The average price of regular tea bags stocked by the big four has risen 3.2% year-on-year from £7.79 per kilo to £8.03. Over the period, the price of own-label tea has risen 2.8%.
Tea drinkers who buy in bulk have been able to mitigate the hikes to a degree. Forty and 80-bag packs of tea have risen around 4.3% year-on-year to £1.31 and £2.33 respectively, but 160-bag packs are up just 2.7% to £3.71 - with some own-label packs as low as £2.21. And shoppers who opt for 240-bag packs are paying just 0.2% more than a year ago, at £4.89.
The picture is mixed for shoppers with more exotic tastes in tea. Earl Grey and rooibos/redbush fans have been hit hard, with volumes prices up 5.8% and 4.2% respectively, while green tea has dipped 0.8%.
Elsewhere in the hot beverages aisle, the volume price of drinking chocolate has risen a fairly modest 2.2%.
But fans of malt drinks - a classic bedtime brew - may be kept awake at night by news that, on average, they are paying 12.6% more for their calming cuppa. Malted drinks have been hit with a double whammy of fewer promotions and an increase in the cost of key ingredients milk and barley.
Tofte mill closure prompts rise in European pulp prices, writes Julia Glotz
European pulp prices have risen in response to the closure of the Tofte mill in Norway in August. The closure of the mill resulted in a drop in already tight supplies, down by 13% since January. At the same time, demand has remained steady in Europe, leading to rising prices year on year. The effects of this are clear to see in the Kraftliner market: at £474.80/tonne, UK prices are now 4.1% higher than this time a year ago, having risen by a 0.8% over the past month.
Rising Kraftliner prices are taking their toll on Testliner too. As Kraftliner prices have gone up, suppliers have started to switch over to cheaper Testliner alternatives, driving up demand in the Testliner market. Prices are being supported further by increasing feedstock prices.
Higher feedstock prices are also behind the price increases for polystyrene, which are up by 14.2% on this time last year, although they have eased by 4.3% over the past month.
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