The price of Jamaica Blue Mountain (JBM) coffee jumped 40 per cent in real terms in a year based which worries Marley Coffee.
Coffee remains scarce based on a confluence of factors now led by summer drought which killed beans.
“We are committed to ensuring our supply chain and providing our customers JBM. We are diligently working to secure more JBM as the market we created for it continues to expand. There still is a high demand for JBM in North America, but limited supply and rising costs may hurt sales,” stated Marley Coffee to its investors this month in filings to the US Securities and Exchange Commission.
The sale of JBM beans largely gives the brand prestige, as the majority of Marley Coffee sales are from cheaper coffee growing regions outside of Jamaica.The company bought US$290,000 worth of JBM over nine-months ending October or two-thirds less than a year ago, financials state.
“We are currently working to address the supply issues and while we believe we will be in a far better position in Fiscal 2015 with respect to JBM availability,” noted the company.
Over nine-months the company recorded a US$7.8 million net loss from US$6.7 million in coffee sales or three times higher losses than a year earlier. Part of the losses are the result of payments to executives at Marley Coffee which surpassed US$1 million over three-months.
Marley Coffee based in Denver, USA, recently gained distribution in over 5,000 stores in North America, with plans to enter 10,000 stores.
Coffee Roasters Jamaica (CRJ) led by the Fletcher family started selling its own single-serve k-cup Jamaica Blue Mountain coffee pods in December.
Its aimed at targeting the fastest-growing segment of the US coffee market. Mark Fletcher, chief executive officer, hopes that the k-cups will grow overall revenues at the company already benefiting from a one-third rise in exports year on year. The company has already sold about 100 k-cup cases in the US.
Few local companies sell their own branded single-cup brewed coffee. Its due in part to the focus on selling green beans to Japan and the industry’s sporadic sales to US which heavily demands k-cups.
CRJ and sister company Country Traders Ltd recently got a renewal inspection for Hazard Analysis and Critical Control Points (HACCP).
Good coffee costs up to US$8 a cup in Eastern Europe. Among the most expensive globally. So the fact that Russians and Ukrainians flock for bargain luxury coffee deals online is logical.
Nothing like the chocolatey aroma and lemon hints aroma of a balanced Blue Mountain cup to warm the bitter winter. Even better when a cup effectively costs US$3 because it eliminated the middle-man.
But what becomes illogical is enjoying coffee in conflict.
Putin’s intervention influenced a spike in global oil prices–the most traded commodity. It increased some 10 per cent February to March to US$104 a barrel (amid fears oil rich Russia would plug gas and oil pipelines running through Ukraine).
However the second most traded commodity–coffee also saw a rise during the same period (February to March) albeit a much higher spike up nearly 2/3rds from 120 to 196. Its blamed on drought in Brazil among the largest coffee producing nations.
It however is happening amid the heightened Ukraine conflict. It will no doubt result in a more expensive cup of coffee for this region.
Despite this impact–the true tragedy is death and conflict and not the cost of a caffeine fix.