DATE: Friday, March 7, 1997                 TAG: 9703070688

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY LON WAGNER, STAFF WRITER 

                                            LENGTH:   44 lines

SEVERAL FACTORS JOLT COFFEE PRICES THE AVERAGE COST OF A CUP OF COFFEE WILL GO UP BY 10 CENTS.

Jumpin' java beans, the price of coffee is going up.

It doesn't matter if you're a coffee snob ducking out for a cup of Kona, or if you'll settle for the Folger's at the bottom of the office coffee urn. It's going to cost you more.

Folger's maker, Procter & Gamble Co., just boosted the average price of a 13-ounce can of coffee by 45 cents to $2.71. That 20 percent jump was more than the company had anticipated, but prices on the New York Coffee, Sugar & Cocoa Exchange in New York hit a two-year high last week.

Normally, a coffee price increase can be pinned to one event - say, a drought in Brazil - but this time several factors have converged and put pressure on prices, said Joseph A. Breslin, CEO of First Colony Coffee & Tea Co. Inc. in Norfolk.

The average cost of a cup of coffee will likely go up by 10 cents, he said.

``We're trying to limit the increase passed to the consumer because we don't want to change the trend of the increased consumption of coffee,'' Breslin said.

That's one thing pushing prices up - the gourmet coffee trend in the United States has jolted sales of a commodity that had been stagnant for years. The industry doesn't want to lose that momentum, but if the price of green coffee beans remains at this level for a couple more weeks, another round of price increases likely will occur, he said.

``There is a price where people will just cut back on their consumption or go to another beverage,'' Breslin said.

But increased demand for gourmet coffee isn't the only thing boosting prices. People in Eastern Europe and developing Asian countries have been drinking more coffee as their economies expand, said Ted Lingle, executive director for the Specialty Coffee Association in Long Beach, Calif.

Also, the coffee industry joined many other manufacturers in the 1990s in going to a just-in-time delivery system. That's fine when supplies are plentiful, but the system is untested in times like this when both demand and prices are high, Lingle said.

Breslin agreed.

``The stocks of coffee is at a lower point than in the last 20 years,'' he said.

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