Coffee Prices Soar: 5 Ways to Save Money Now

Last Updated Apr 26, 2011 10:36 AM EDT

Inflation is heating up the coffee market, as bean prices surpass $3 per pound - the highest level in about 34 years. Bad weather in Colombia, the world's second-biggest coffee producer, has put a major dent in supply, while global demand is soaring - in part due to a growing middle class in India and China.

For coffee drinkers in the U.S. this will more than likely mean a jump in prices at both coffee shops and supermarkets. Starbucks has already announced it's raising prices for the packaged coffee that it sells to retailers. The company also suggests stores pass along its price hike to customers by raising prices on a 12-ounce package to $9.99 from $8.99. Meanwhile, Folgers and Dunkin Donuts have also increased their prices on packaged coffee during the past year.
That's hard news for younger Americans, who are drinking more coffee these days. (The National Coffee Association's 2011 survey found that 40% of those aged 18-to-24-year-old group drink coffee daily - up from 31% in 2010.) Here are 5 ways to keep your coffee habit without getting jolted by the new price shocks.
Go for a Misto
A Starbucks grande latte, which is made with espresso plus steamed milk, costs a little more than $4.00 in New York. Opt instead for a grande misto, which is drip coffee and steamed milk, and you can save about $1.15 per drink. I do this from time to time myself, and find the taste and experience quite similar. If you make a daily run, over the course of a year you could save close to $420.
Buy Discounted Coffee Gift Cards
At GiftCardRescue.com, a Web site that lets you buy, swap and sell gift cards, I recently found a slightly discounted $20 Starbucks gift card selling for $18.20. Just make sure to click on the free shipping option (which requires no signature or delivery confirmation), otherwise you'll pay more. Deals come and go fast, so check the Web site periodically; if you can't find what you want, add the store to your "Wish List." At fellow discount gift card Web site PlasticJungle.com, meanwhile, you can request an email alert when new gift cards become available.
Manage Consumption with Coffee-Friendly Apps
An educated consumer is usually a more financially savvy consumer. Use an iPhone app to track your coffee habits and expenses - and get a grip on overspending. Daytum lets you track and chart any type of behavior or spending pattern; Too Much Coffee focuses specifically on your coffee habit.
Bulk Up and Freeze
You can save some money by buying packaged coffee in bulk or stocking up when your favorite brand goes on sale, then freezing what you don't need right away. There is much debate over the wisdom (or not) of freezing coffee - but in a 2009 taste test and study called Coffee: To Freeze or Not to Freeze, researchers Ken Fox and Jim Schulman concluded that if you immediately freeze freshly roasted coffee "in a near airtight container" and "in a very cold freezer," it can sit there for at least two months and "be expected to produce espressos that are not obviously inferior to those made from fresh coffee that has never been frozen."
Snag Deals on Social Buying Sites
Groupon, Living Social and other daily deal Web sites occasionally offer coffee deals from local coffee shops. For example in March, Groupon Orlando sold $19 vouchers worth $39 of organic coffee beans from The Bean Coffee Company, an online store. You could buy up to two vouchers. So keep an eye out and stock up, because remember - you can always freeze!
More on MoneyWatch:
  • Farnoosh Torabi On Twitter»

    >> View all articles

    Farnoosh Torabi is a personal finance journalist and commentator. She is the author of the new book Psych Yourself Rich, Get the Mindset and Discipline You Need to Build Your Financial Life. Follow her at www.farnoosh.tv and on Twitter at @farnoosh.

Comments

CBSN Live

pop-out
Live Video

Market Data

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.

Market News

Stock Watchlist