From the very start of the new year, a string of price hikes is sweeping across food and beverages. With prices rising from coffee franchises to convenience store private-label (PB) products and hotel buffets, concerns are growing that consumers are feeling a heavier burden from inflation.
According to related industries on the 6th, coffee franchises are adjusting prices of major menu items, citing green coffee prices and exchange rate pressures. Coffee Bean Korea raised the prices of drip coffee and the decaf option starting the day before. The small drip coffee went from 4,700 won to 5,000 won, and the regular size from 5,200 won to 5,500 won. The additional expense for switching from regular beans to decaf beans was also raised from 300 won to 500 won. The average increase is about 6%, the first price hike in about a year since Dec. 2024.
Low-cost coffee brands that have emphasized price competitiveness are no exception. Banapresso raised the takeout price of an iced americano from 1,800 won to 2,000 won, and HIO COFFEE raised cappuccino and cafe latte prices from 2,800 won to 3,000 won each starting in mid-Dec. last year. With coffee consumption now part of daily life, price hikes even among budget brands are further increasing the burden on consumers.
Analysts say international green coffee prices and a strong dollar-won exchange rate are working together behind the coffee price hikes. According to the Korea Agro-Fisheries & Food Trade Corporation (aT) Food Industry Statistics Information, as of the 2nd, the international price of arabica green coffee was $7,877.04 per ton (t), up more than 6% from a year earlier. On top of that, with the won-dollar rate stubbornly staying in the 1,400-won range, the cost burden for coffee beans, which are entirely imported, is mounting.
Statistics also confirm the upward trend in coffee prices. According to the Korean Statistical Information Service (KOSIS), with 2020 set at 100, the coffee consumer price index in Dec. last year was 143.98, up 7.8% from the same month a year earlier. The index includes instant coffee and canned coffee as well as convenience store pouch coffee, suggesting that coffee-related prices have generally risen both at home and outside.
The government plans to extend tariff quotas on some food ingredients, including coffee, to stabilize prices. Deputy Prime Minister and Minister Koo Yun-cheol said at the ministers' meeting on the economy and the ministers' meeting on prices last month that "we will extend tariff quotas on 10 food ingredients, including sugar and coffee, until the end of next year."
In the convenience store sector, price hikes are continuing, centered on PB products. Seven-Eleven raised prices on more than 40 PB items, including snacks and desserts, by up to 25% starting this month. The milk cream salt bread and chocolate milk cream salt bread went from 3,200 won and 3,300 won to 3,500 won, respectively, and Seven Select Nunettine was adjusted from 1,200 won to 1,500 won. Gourmet butter popcorn was also raised to 2,000 won.
GS25 also adjusted PB product prices for the new year. Two varieties of Great Sausage rose from 2,600 won to 2,700 won, and Movie Theater Popcorn and Butter Garlic Popcorn each increased by 100 won from 1,700 won to 1,800 won. The explanation is that the burden of materials and supplies costs and logistics costs has accumulated across the convenience store industry.
The rise in dining-out prices is also appearing in the high-end dining market. LOTTE Hotel Seoul buffet "La Seine" raised the weekend dinner adult price from 198,000 won to 203,000 won, up 2.5%. The weekend lunch price is also increased to 203,000 won. "Aria" at The Westin Josun Seoul, operated by Josun Hotels & Resorts, also rose 4% from 175,000 won to 182,000 won for weekend dinner for adults. Weekday lunch increased 6.6% from 150,000 won to 160,000 won.
Shilla Hotel buffet "The Parkview" also plans to raise the weekend dinner price by 5% to 208,000 won starting in March. The hotel industry said that because most premium ingredients are imported, they are highly sensitive to exchange rates, and combined with rising labor costs, cost pressures have intensified.
Inside and outside the industry, the view is that, with a strong dollar-won rate and raw material price volatility continuing, the burden of prices across food and dining out will not ease easily for the time being. An industry official said, "In a prolonged strong-dollar environment, it is difficult to quickly resolve cost pressures," adding, "price pressures across food and dining-out inflation could continue."