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Coffee prices in Russia more than double in seven years – study

The cost of a cup of java has soared by 118% since 2016, according to an analysis

A cup of coffee in Russia now costs more than twice as much as it did seven years ago, RBK news outlet reported this week, citing a study from one of the country’s major financial data firms, OFD Platform.

According to the findings, the average price of a 150-200ml cup of the beverage in August-September stood at 166 rubles ($1.70). This marks an 11% increase compared to last year and a significant 118% rise compared to the prices in 2016.

Authors of the study note that while price growth was slow before 2020, costs started to rise significantly during the Covid-19 pandemic.

A serious price change began in 2020, a shock year for the catering industry when the coronavirus pandemic broke out. It led to an increase in the cost of a cup of coffee by 15% with a dramatic decrease in customer traffic,” OFD Platform CEO Alexey Barov said. He clarified that the analyzed price of a coffee in the study encompassed various elements, such as the expenses for coffee beans, milk, labor, utilities, and other associated costs, in addition to any markups by coffee shops.

Barov attributed the ongoing price hikes in 2021 and 2022 to several factors. He connected this growth to a global price increase resulting from poor coffee bean harvests in major producing nations. Furthermore, the departure of several FMCG (Fast Moving Consumer Goods) brands from Russia due to Western sanctions imposed on Moscow in response to its involvement in the Ukraine conflict has also played a role. These combined factors led to a substantial 61% surge in the average price of a cup of coffee in 2022.

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Coffee prices skyrocket

Analysts also noted that currency fluctuations resulting from sanctions had an impact, particularly on the cost of imported coffee beans. In 2020, the exchange rate averaged around 72 rubles for one dollar, showing stability without significant spikes. However, the rate has surged above 100 several times since last year. As of now, the average exchange rate for 2023 stands at approximately 82 rubles per dollar, but the current rate has climbed above 96.

In contrast, the price hikes for packaged coffee in Russian stores showed less significant fluctuations during the same period. In August-September, the average price was at 289 rubles ($2.90) per pack, representing a modest 1% year-on-year increase but marking a substantial 52% surge compared to 2016 figures. The most significant spike in prices for this product occurred in 2022, when costs leaped by 28%.

The report is based on 90 billion coffee shop and grocery store receipts in the OFD’s BigData system.

For more stories on economy & finance visit RT’s business section

September 24, 2023 at 12:16PM

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