He is a rundown of the issues that we are facing this month here at Delta Coffee Works. Sit back and enjoy!
Plastic Lid Shortage:
The plastic lid supplier for our 2lb canned coffee has recently informed us that they will not be able to supply us until at least February 2022. This could be pushed back even further. To keep our customers happy and keep your shelves stocked we have just completed a full line of the same coffees now available in bags. The difference being that now the 2lb dark roast coffees will again be a full 2lbs.
New Retail Line of Coffees:
Delta Coffee Works is proud announce that Best Gourmet Coffee Company Coffees that have always been offered in a big tin are now available in a bag option. The new coffees are meant to be refills for the tins. We have decided to do this as a way to combat the current cost of importing our tins which sits above $3.00 per unit, as well as to deal with the lid issue. We will pass the savings in production off to our retailers who will be able to price the coffee more aggressively than the tins. Please tell customers who love their tins to save them!!!
Coffee Market Update:
Coffee pricing at origin is based on the commodity market price where coffee is priced at C plus a premium or a discount based on quality and year of harvest. A coffee price may be expressed as follows C + 1.85 in USD. For this coffee we would substitute C for the todays commodity price (2.03) to solve this we can say that this coffee is 2.03 + 1.85 = 3.88 USD per lb. as a raw coffee plus shipping. Since August we have seen sustained pricing above $2.00 USD per lb. last year we were seeing the price just over a dollar per lb. for C. This price level has been maintained because of the Brazil drought and frost along with a low yield in Colombia with civil unrest also contributing in that country.
Our outlook is that coffee will continue to rise until the next year’s harvest from Brazil and Colombia are estimated and a crop recovery is foreseen.
Shipping: As we are aware thanks to the news we are also seeing astronomical shipping costs for international marine shipping. These costs have been getting higher, we have seen an additional 20% increase since last time that we adjusted costs to reflect these new costs.
Packaging Supplies: Everything from tape to boxes to shipping labels have had price increases. Today our box supplier tacked on an additional 10% price increase.
Allied Products: Syrups and sauces, teas, cups, and all things that we deliver have seen price increases and stock outs. We are doing our best to look at alternative suppliers but we recognize that the pressures that we are facing are the same in nature as our suppliers.
That’s all for now!
Delta Coffee Works Team.