The world’s top coffee drinkers are celebrating National Coffee Day amid historic shortages and rising prices.
Google searches for “free coffee today jumped 2,650 percent in the past day. US coffee giants like Starbucks and Inspire Brands Dunkin’ Donuts are racing to offer free drinks in the wake of National Coffee Day, celebrated on Sept. 29, as the industry deals with unprecedented challenges.
Hit hard during the pandemic, the sector is not expected to fully recover from the pandemic until 2023. The coffee-chain segment saw sales drop by nearly a fourth to $36 billion in 2020. By 2025, the market may exceed $50 billion in annual sales, according to market researcher Allegra Group.
But climate change and supply-chain disruptions are threatening to further delay this recovery.
Arabica-coffee futures have surged about 50 percent this year as droughts and frosts have led Brazil, the world’s largest coffee producer, to project a 12-year low output. The country is expected to harvest 40 percent less high-end arabica beans than last year -- a loss that is equal to about two-thirds of annual US consumption.
Meanwhile, in Colombia, the second-largest arabica supplier, excessive rainfall risks exacerbating the forecast world deficit. Other coffee producers like Vietnam and India have also experienced hindered crop flows.
As a result, stockpiles on the ICE Futures US exchange are headed this month for the largest decline in a year.