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Debt Crisis Hurting Southern European Coffee Bars

European espressoSouthern Europe’s debt crisis has led to unemployment and diminished household budgets to the point that the region’s social hubs — local coffee bars — are in danger.

A recent Wall Street Journal report suggests that per capita coffee consumption remains high in countries like Spain, but consumers are more likely to pursue cheaper robusta grocery store blends than spend for the experience and coffee quality provided by local coffee bars.

The Journal cited a report from market analyst Euromonitor International that said, “The overwhelming mood of frugality which now dictates the spending habits of many Spanish consumers will mean Spaniards will look for less expensive alternatives to coffee this year, such as store-name brands.”

Evidence of the shift in coffee spending habits can be seen in changes in the arabica and robusta trades throughout Europe:

Prices for arabica beans have dropped 30% so far this year while the cost of robusta has climbed 18%, moves that traders attribute largely to shifting demand in Europe. Meanwhile, the gap between the prices of the two coffees recently had shrunk to its smallest since July 2009, when the continent’s debt problems were developing.

The full story: Wall Street Journal

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