NEW YORK and LONDON - JM Smucker announced earlier this week that it has raised its retail prices of coffee by nine percent, effective immediately, after wholesale costs reached a 12-year high, the Financial Times reports.
The price increase affects the company's Dunkin' Donuts, Millstone and Folgers coffee brands sold to U.S. retailers.
With unemployment still above nine percent, it is uncertain whether retailers will pass along those increases to consumers, or whether an emphasis on private label brands will increase. Kraft, which distributes Maxwell House coffee, declined to comment.
Starbucks historically has shown restraint in raising its coffee prices, continuing an effort by CEO Howard Schultz that focuses on "pricing architecture" and eliminating the perception that a cup of coffee at the chain costs $4.
Tim Hortons, which has a large U.S. presence, said that it books its coffee contracts at least six months out, which should preserve current pricing, at least in the short-term.
Since early June, wholesale prices of Arabica coffee have risen more than 30 percent, a spike that is expected to continue, according to London's International Coffee Organization.