Calgary

The run of very bad luck that's likely to make coffee much more expensive

As coffee futures reached 10-year highs in New York on Wednesday, a Calgary coffee supplier says paralyzed border crossings are just one more obstacle among many others that are likely to cause a coffee shortage that'll have people paying more for their morning brew.

It includes drought, frost, shipping, COVID, protests and a flood

Paralyzed border crossings are just one more obstacle among many others that will likely be reflected in the price of coffee, a supplier says. (Frank Gunn/The Canadian Press)

Last week was stressful for Carlos Gutierrez.

Protests trapped 2½ tonnes of beans for his Calgary-based company, Single Origin Coffee, at the U.S.-Canada border crossing at Coutts, Alta.

His company supplies coffee to roasters across Western Canada.

More stressful still, the company imports and distributes green coffee beans, which means they aren't roasted. According to Gutierrez, this "finicky product" will absorb different odours — and won't tolerate exposure to warmer or cooler temperatures for long.

"We started moving to see if we could use other ports of entries, but one of the trucks got too far ahead of the line and it couldn't turn around," Gutierrez said.

"And so we had to wait until last Friday, when [it] finally arrived."

The incident on its own was enough to induce anxiety, Gutierrez said. 

But as coffee futures reached 10-year highs in New York on Wednesday, paralyzed border crossings became just one more obstacle among many that are likely to cause a coffee shortage, which could have many coffee drinkers paying more for their morning brew.

Drought, frost, shipping, COVID, protests and a flood

Last year, Gutierrez says, Brazil and Colombia suffered a drought. Then Brazil had frost, while Colombia got lots of rain.

"That diminished the harvest in both countries," Gutierrez said. "Brazil being the biggest producer in the world, well, it moved the needle for the prices to begin with."

Next, the COVID-19 pandemic snarled shipping. And then, Gutierrez says, the shipping companies stopped working in many places, because they didn't have enough goods to transport. 

"And now, we have the opposite [problem]," he said.

"The West Coast of North America is loaded with ships waiting to be offloaded — not just coffee, but just about everything coming from all over."

That's also causing the price of coffee, and how long it takes to ship it, to increase, Gutierrez said.

But wait. There's more.

"To get the picture even worse … B.C. had the flood, and we use Vancouver as our hub to bring coffees either from North America or any other country through the Pacific," he said.

That flood destroyed stretches of highway and bridges that connect the province to the rest of Canada.

As a result, nine tonnes of Gutierrez's coffee was stuck for 3½ weeks in Vancouver, where just warehousing the beans is more expensive.

More recently, his company has been trying to buy from Central America and South America.

But Colombia just declared this past week that its harvest went down 20 per cent — which means fewer coffee beans, Gutierrez says, that everyone will be fighting for.

"So that's gonna make coffee, absolutely, very expensive," he said.

"Now we have an extra little problem, which is … people protesting and blocking the entrance to Canada. And so, this thing is getting very interesting."

The coffee bean scenic route

The ongoing challenges are causing Gutierrez to get creative.

For example, he would normally move beans from Colombia up through the Pacific. But he says the price of moving beans from Central and South America north to those ports has quadrupled.

And so instead, his next shipment is taking the scenic route: through the Caribbean and along the East Coast to Montreal.

"I was a logistics manager for Royal Dutch Philips in South America, and I have a couple of tricks down my sleeve. And I have used all my connections, all my friends … everything I can," he said.

From Montreal, the beans will travel on a train across Canada to Alberta. And it'll get here around April. 

And if he went the Pacific route, Gutierrez said, it would have cost him more and arrived by August.

"Fortunately, in 15 years, you make enough friends … and paying favours. Now, I owe favours."

Eating the costs

Jesse Brewster, who owns Loft Coffee in Calgary, is one of the roasters waiting for that shipment. And it's still expensive.

He says it's going to cost him 40 per cent more than what he paid for the same coffee in October.

"You can't raise retail prices 40 per cent. I mean, it's just too high, right?" Brewster said. "So, you know, we'll be eating a little bit of those costs, that's for sure."

And there are other places, such as cafes, restaurants and bars, that are likely to notice supply disruptions, too.

Restaurants Canada conducted a survey in January that garnered 759 responses from business owners that it says represents 6,846 food service locations across Canada.

According to the results, 96 per cent of restaurants are experiencing a disruption in supplies of food and equipment.

And the majority of takeout and table-service restaurants reported a shortage of containers, cutlery — and coffee cups.

With files from Reid Southwick

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