Coffee drinkers swallow price hike

The rising cost of high-end coffee has not dissuaded many drinkers from their daily cup of joe.

ABU DHABI, UNITED ARAB EMIRATES - July 16, 2008: A customer picks up his coffee at Starbucks in Marina Mall in Abu Dhabi. ( Ryan Carter / The National ) *** Local Caption ***  RC003-Starbucks.JPGRC003-Starbucks.JPG
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ABU DHABI // As he sipped on his Dh16 cup of black coffee at Barista in Marina Mall this week, Mohamed Bissan said the hike in the price of Java had not persuaded him to give up his habit.

"Right now, the price is perfect," said Mr Bissan, a university student from Syria. "Even if the price goes up, I'd still come here."

As high-end coffee prices rise, espresso drinkers say they are ready to spend whatever it takes to get their daily fix.

But they will soon have to fish in their pockets for more dirhams. The price of Arabica coffee - a high-quality bean favoured by espresso connoisseurs - rose to a 34-year high last week, nearing US$3 (Dh11) a pound. Poor global harvests have combined with increased domestic consumption in Brazil - where many of the high-end coffee beans are grown - to drive up costs.

Yet at Starbucks in Abu Dhabi's Al Wahda Mall, one customer, Peter Jankovic, said the price of his double espresso would have to double before he would consider cutting back.

With a three espresso-a-day habit, Mohamed Selam said he always bought coffee from one of the major chains, and would be willing to pay a higher price.

"I've tried to make it at home and it doesn't taste the same," said Mr Selam, a pharmacist from Egypt.

In the UAE, a growing love of coffee has resulted in consumption almost doubling since 2005, rising to 7,156.4 tonnes last year, according to the market research group Euromonitor.

But as prices jump, coffee outlets are doing all they can to avoid losing custom by passing on price rises to their clientele. Gloria Jean's UAE area manager Bal Krishna said the company tried to find cheap suppliers to forestall raising prices.

Mr Krishna said that as a cheaper option to Starbucks, Gloria Jean's relied on heavy traffic to help recover what was lost on raw materials in the global market.

Barista, however, is one chain that raised prices at the beginning of the year.

Some drinks, including lattes and cappuccinos, have gone up a dirham.

The measure doesn't raise profits, according to Niraj Gautam, the Marina Mall Barista manager, but was needed to compensate for the cost of "raw materials".

"The customers understand why there's an increase because we're all working in the same market," he said, adding that the company takes measures to protect clients.

Despite the increase in the cafe's ready-made food costs, Barista has refused to raise food prices.

The volatility of food prices in the last year has made the management hopeful that raw materials may get cheaper.

"We're holding to a while to see if it drops," Mr Gautam said. "Now isn't the right moment [to increase food prices]."