Global coffee price hikes aren't slowing down. Greater Peoria roasters are feeling the pinch | Peoria Public Radio

2022-04-25 06:06:15 By : Mr. Willy Kuan

Walk into the basement of the Trefzger’s Bakery building in Peoria Heights and you're immediately hit with the rich, nutty aromas of freshly roasted coffee.

Inside its roastery and retail shop, Leaves ‘n Beans roasts about 20,000 pounds of raw coffee every month.

The roaster itself is a shiny, black and gold machine, with a front façade that kind of resembles an old-fashioned steam train. Behind the roaster are large plastic tubs, each labeled with the name of a different country: Colombia; Papua New Guinea; Ethiopia.

Global supply chain issues brought on by the COVID 19 pandemic led to an increase in prices for a lot of goods, coffee included. But while prices for some commodities have stabilized or even begun to fall, Leaves ‘n Beans owner James Cross said coffee continues to go up.

“The most expensive we can get currently is Jamaican Blue Mountain,” he said. “Back in the day, in ’08 when I got into this business, that coffee was 22 a pound. Now it’s like 40. Raw,” he said. “And we have to buy a 150-pound barrel.”

Local coffee roasters throughout Greater Peoria say there are myriad reasons why coffee prices are going up. A bad frost at the wrong time. Shipping container shortages. Exporters losing their financing.

Price hikes are changing production and ordering schedules — even the types of coffee that can be roasted.

In its 11 years of business, Thirty Thirty Roasting Company has raised prices twice, both times during the COVID-19 pandemic.

Co-founder Dan Williamson said he hates raising prices, but at some point, something’s gotta give. One of the shops most popular beans — a Papua New Guinea — jumped from $2.20 a pound before COVID to $6.50 a pound.

“People ask why a latte costs $5,” he said. “The coffee came from across the damn world.”

Standing in front of a sepia-toned world map hanging in the Leaves ‘n Beans roastery, Bryce Seyko described the three regions where coffee is grown: the Americas, Africa, and Asia Pacific.

Coffee can only grow between the 30th parallels, also known as the Tropics of Cancer and Capricorn.

Prices have risen everywhere, but Seyko points to one country as the culprit: Brazil, where 80% of the world’s Arabica beans are grown.

Every other year Brazil has a “bad year,” Seyko said, and “bumper crops” are harvested to mitigate that.

But Brazil’s “bad year” happened to overlap with the start of the COVID-19 pandemic. Throw in a cold snap, and suddenly, Brazil’s no longer harvesting near the amount of beans it needs to to keep international prices stable.

“Coffee is an international commodity very similar to oil, second only to oil, in the amount that is being traded,” said Sekyo. “When Brazil has a crop issue … it’s like the Middle East. You can say, ‘OPEC will set the price of oil,’ since they produce the most amount globally.”

As a result, every growing region has seen price increases.

For example, the Colombian bean Leaves ‘N Beans uses specifically for its flavored coffees — such as crowd favorites "Blueberry Crumble" and "Jamaican Me Crazy," used to cost $1.80 a pound. Now it's around $3.60 a pound.

And that's affected shipments; before the pandemic, Cross would order six months of coffee at a time. Now he's only ordering a month's worth.

At Keller Station, CxT Roasting Company has seen its Brazilian bean jump from $1.80 to $3.38 a pound, while the Columbian import recently climbed from $2.55 to $3.65 a pound.

Before opening CxT in 2016, co-founder Mitchell Popadziuk worked in supply chain logistics for Caterpillar. So he understands how and why the coffee trade is so complicated.

Echoing Seyko, Popadziuk described Brazil and Vietnam as "c-growers," producing large-scale quantities of commercial coffee beans for companies like Folgers and Maxwell House.

"A lot of importers, what they'll do is they'll just take the c-market and they'll add a certain value on top of that," he said. "They'll peg the pricing to the c-market for what we call 'specialty-grade' coffee."

In other words, if Brazil catches a cold, the rest of the world sneezes.

And that's before one factors in the other logistical nightmares associated with the pandemic.

“A lot of Central American coffees were actually delayed because of shipping container shortages,” Popadziuk said. “Which is kind of a shame because, you know, the coffee is there, and ready to go. But they just can't get it to our ports.”

Indonesian coffee exports is a sad example.

“They actually make a stop into some of the Chinese ports before heading over to the west coast of the Americas,” Popadziuk said. “And those have been held up in ports for sometimes up to a month, just waiting for clearance … the ports are so backed up.”

CxT is still able to source and roasts upwards of 20 different single-origin beans. And because ordering is pre-contracted, CxT hasn’t been forced to pass price hikes onto customers.

But Popadziuk worries about what may have to happen when those contracts end … and whether the coffee can even get to Peoria.

“Since the coffee prices have gone up so much recently, the banks are not extending lines of credit as much as they used to. So, our importers … they're getting the same line, but now the coffee is twice as expensive. So they're unable to buy as much,” he said. “And the exporters are facing the same problem, where they can't get enough credit to actually buy as much coffee as they used to, to actually send it out. So, we have sort of a weird financial issue, not necessarily a crop or growth issue.”

Williamson co-founded the Thirty Thirty Coffee Company 11 years ago. Named for the parallels defining the world’s growing regions, Thirty Thirty specializes in “micro lot” production. Every day, Williamson roasts several small batches of various beans for both wholesale clients and retail customers.

Standing next to the roaster on a rainy afternoon in early April, Williamson begins a 13-minute roast for an espresso bean blend.

After he turns on the gas-powered roaster and dumps raw green beans into a funnel, he carefully eyes a series of pressure gauges, jotting down notes and numbers on a piece of paper.

“I've also got a couple of different readouts for my ambient temperature. I've got my gas percentage, the airflow with the exhaust. Exhaust fan speed,” he said, pointing to the dials. “Basically, I use these controls to profile the coffee, and get exactly what I'm hoping to get out of it.”

The simple act of roasting adds a premium from the jump, Williamson points out; beans lose 16% of their moisture during the roasting process.

Sourcing and affording specialty coffees isn't the only financial headache Thirty Thirty’s faced. The cost of wholesale products necessary for retail service and wholesale shipping also are through the roof.

A case of 1,000 16-ounce plastic cups cost $58 before the pandemic. Now, Thirty Thirty pays as much as $182 for the same amount.

“If we can find them,” Williamson adds.

Until global markets neutralize, Seyko hopes Tri-County coffee drinkers will be understanding if and when they see their favorite local shop raise prices.

“It's not because we're inflating with everybody else. It is because we are at the tail end of that supply chain,” he said. “It's kind of hard to explain supply chains. But now everybody is firsthand experiencing supply chains. With a local coffee company like us, you can see it when our prices go up.”

Despite the challenges, Williamson loves what he does. He said he knows local roasting brings value to Greater Peoria — and there's nothing like getting a coffee roast just right.

“It's a 13 1/2-minute batch. But five seconds at the very end can change the entire profile of everything,” he said. “Every day can be a little bit different … ambient humidity, temperature inside the room itself … Yesterday, it was raining, my profiles were completely different from what they were the day before.”

There’s a science, a craft to roasting coffee beans.

And now more than ever, every batch counts.

“That's the challenge. That's the fun of it,” Williamson said. “I definitely have that pressure to really just do the farmers proud. Because they did a lot of work, as far as the growing and the processing. … I feel as though I'm doing my job when you don't even notice that I was a part of the equation. When I let the coffee speak for itself, and just highlight the work of those farmers.”

Learn more about the Leaves 'n Beans roastery and retail store, as well as the company's Pekin, Morton and Peoria Heights cafe locations, online.

Learn more about CxT Roasting Company’s Keller Station and Downtown ‘Apollo’ locations and wholesale offerings here.

Learn more about Thirty-Thirty Coffee Company micro lot batches and wholesale options here.