US restaurant chain Caribou Coffee Co. is panic hoarding coffee beans as a global supply deficit grips the world and fuels inflation.
"We continue to increase safety stock on key items," CEO John Butcher told Bloomberg. Besides coffee beans, he said the company is loading up on cups, lids, packaging, chocolate, and anything that comes to mind as supply chains remain snarled.
Butcher said, "my gut tells me to hope for the best and to prepare for the worst. I personally don't see any reason to believe that supply-chain disruptions are going to go away anytime soon."
"Everybody is in the same boat: They're hopeful that things will improve by the end of 2022. But for now, we have to prepare as though they won't," he said.
Caribou, now part of Panera Brands, has approximately 450 US locations and plans to expand its franchising program in 2022. However, an emerging global supply deficit of arabica coffee beans (something we first warned in March and later explained in May), disruptions of logistical networks around the world, caused by container shortages and port congestion, will continue to elevate coffee prices higher for longer.
Arabica coffee prices have soared to fresh decade highs this week, as news of the global supply deficit paints a grim outlook for 2022. Some of the deficit originated in Brazil, one of the world's top coffee producers, as droughts and frosts crushed crops.
"We believe in a deficit of around four million bags, other analysts see it as high as seven million bags," Carlos Mera, head of Rabobank's commodities desk, wrote, adding that exports from Brazil and other top producing countries are slowing.
If Caribou is panic buying coffee beans, imagine what Starbucks are other larger chains have been doing...