EXCLUSIVE: Starbucks Talks To Benzinga About Price Hike

Alan Hilowitz, Starbucks' SBUX Director of Corporate Communications, spoke to Benzinga today about the 17 percent price increase on packaged coffee that was announced yesterday. The announcement was made in a statement that read, “For the first time in nearly two years, Starbucks will increase the price of packaged coffee in its retail stores in the U.S. by an average of 17 percent, and in its Canada stores, for the first time in almost four years, by an average of six percent, effective July 12, 2011. As part of our comprehensive approach to providing the Starbucks Experience, Starbucks carefully monitors and evaluate costs, including green coffee prices, other commodity and operating costs and competitive dynamics. We respond with pricing adjustments that balance our need to run the business effectively while providing maximum value to our customers.” Speaking exclusively with Benzinga, Hilowitz said that, “The context is that if you look at the other major players, namely Kraft KFT and Smucker SJM, they have each taken four cumulative price increases this year alone. We have held our pricing for packaged coffee in our stores since 2009. We are taking the price increase in order to effectively run the business. I think the rising commodity costs story overall, green coffee at historical highs, other commodities, fuel, etc. is driving this as a story.”