Proactive Investors - London’s bleary-eyed morning commuters could be in for a rude awakening if the global coffee bean shortage continues to drive brew prices up.
Soaring demand for the cheaper robusta bean variety (yet another effect of the cost-of-living crisis perhaps?) is causing a global shortage of the hardier bean as growers struggle to keep up.
Meanwhile, robusta’s more sophisticated cousin, the arabica variety typically used in fancier outlets, has been hit by severe frost and natural disasters in the arabica-growing hotspots of Brazil and Central America.
Though robusta, which is mainly grown in Vietnam and Indonesia, is typically used in instant coffee blends, it is also finding its way into espresso-based brews.
Recent supply constraints from all this demand have sent London robusta futures soaring to a 12-year in the past week, marking a 30% year-to-date increase.
This is great news for investors, but a portent of more pain to come for caffeine fiends seeking a morning pick-me-up.
As noted in Bloomberg today, instant coffee prices in Europe’s largest coffee market Germany have increased by up to 20% in the past year, for which London commuters can certainly commiserate.
Some chains, such as popular City haunt Black Sheep Coffee, exclusively use robusta in their cuppas, while the nation’s greasy spoons tend to use cheaper blends consisting of both arabica and robusta.
Now that £4 flat whites are far from uncommon, could six ounces of liquid comprising one-third espresso, one-third steamed milk and one-third foam really head above a Lady Godiva?
With strikes causing chaos up and down the country, and those post-work beverages becoming prohibitively pricey, surely our morning caffeine hit is safe for now, right?