Low-priced coffee brands that have grown by touting low prices even amid high inflation are raising prices one after another. As prices for coffee beans and other materials and supplies, labor, and logistics all rise at the same time, analysts say it has become difficult for the budget coffee sector to keep existing prices.
According to the coffee franchise industry on the 2nd, MAMMOTH COFFEE will raise prices by 200 won for some iced Americano and iced decaf Americano items starting on the 11th. The iced Americano small (S) size will increase 16.7% to 1,400 won from 1,200 won. The medium (M) size will also rise 12.5% to 1,800 won from 1,600 won.
For iced decaf Americano, the small size will be adjusted to 2,100 won from 1,900 won, and the medium size to 2,500 won from 2,300 won. The increase rates are 10.5% and 8.7%, respectively. However, prices for hot Americano and iced/hot Americano large (L) sizes will remain at previous levels.
MEGA MGC COFFEE raised prices by 200 won each for three beverages in June. The company cited higher prices for key inputs and greater profitability burdens on franchisees. The Venti raised prices for coffee and beverages except Americano by 100 to 500 won in May.
Banapresso also raised prices for decaf and cold brew products in March. Bruda Coffee likewise adjusted prices for some drinks such as Americano, cafe latte, and vanilla latte that month. PAIK'S COFFEE raised prices for key menu items such as cafe mocha and ice cream cafe mocha in February.
Low-priced coffee brands have been cautious about price hikes for some time. Because product prices directly influence brand choice, they have responded by having headquarters or franchisees absorb higher costs. But as cost pressures have accumulated over a long period, more brands are raising prices for select products.
Industry officials cite the simultaneous rise in international coffee bean prices, exchange rates, logistics costs, and labor costs as key reasons for price adjustments.
According to the Korea Agro-Fisheries & Food Trade Corporation (aT) Food Industry Statistics Information, from Apr. 28 to Jul. 28, prices of arabica coffee beans rose 15.25% to an average of $7,482.41 per ton from $6,492.07. During the same period, robusta bean prices also rose 5.33% to $3,877 per ton from $3,680.67.
Labor cost burdens are also expected to expand. The 2027 minimum wage was raised 3.7% to 10,700 won per hour from this year. For low-priced coffee brands with a high share of franchise locations, the higher minimum wage is likely to lead to increased store operating costs.