Due to supply chain disruptions and rising input costs, coffee prices have recently hit seven-year highs. However, analysts expect coffee prices to have little or no effect on coffee consumption. In fact, coffee consumption is expected to rise this year. Thus, we think popular coffee retailers Starbucks (SBUX) and Dutch Bros (BROS) should benefit. But which of these stocks is a better choice now? Read more to find out.Dutch Bros Inc. (BROS) operates and franchises drive-thru shops. The Grants Pass, Ore.-based company offers various coffee-based beverages, energy drinks, tea, lemonade, smoothies, and other drinks. The stock began trading on The New York Stock Exchange (NYSE) under the symbol "BROS" on September 15, 2021. In comparison, Starbucks Corporation (NASDAQ:SBUX), which is headquartered in Seattle, Wash., operates as a roaster, marketer, and retailer of specialty coffee worldwide. It offers various coffee and tea beverages, ready-to-drink beverages, and various food products.
Supply disruptions from Brazil to Vietnam and rising input costs have pushed coffee prices to seven-year highs recently. Arabica futures for March delivery increased 4.8% to $2.235 per pound in New York, the highest for a most-active contract since October 2014. Moreover, analysts expect that prices could surge as high as $3.
But because coffee is an essential part of so many people’s daily routines, coffee consumption is expected to be little affected notwithstanding its rising price. Indeed, global coffee consumption is expected to rise to 168.8 million 60-kilogram bags this year, up from 164.8 million bags in the previous period. Thus, popular coffee retailers BROS and SBUX should benefit.