Intelligentsia Coffee may be paying “at least 25 percent above the Fair Trade price” for its coffee, but is turning a profit, “with 2005 sales of $9.4 million and a 2006 growth rate of 21 percent.” Intelligentsia’s keys to success are the idea that drinkers will pay considerably more for better quality coffee, and that growers can share in the margins if they produce better beans. Intelligenstia’s idea apparently takes notions of “Fair Trade” to another level — as “Fair Trade relates only to working conditions, not the quality of the coffee beans.”Good for them. If Intelligentsia Coffee can get more money into the hands of small coffee growers, they have my vote.
But I can't help wondering just how much coffee drinkers are willing to pay. How high can prices go before people just say no?
The price of a good cup of quality coffee is pretty high if you buy it at a coffee shop.
Meanwhile, the price of good coffee at home is getting higher too. People are now spending $150 or more for the latest single-cup coffee makers, and anywhere from 25 to 50 cents per cup of coffee when they buy their K-cups or coffee pods to fit these fancy machines.
I have no doubt that each day at least one person shakes his or her head and remembers that you can make some great coffee with a handful of reasonable Arabica beans and a five dollar manual drip cone filter.
But what happens when a thousand people a day start shaking their heads?
Are coffee drinkers willing to pay more and more? Or is there a bubble here, waiting to burst?
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