Covid-19, higher green coffee prices and rising freight costs have led to mixed fortunes for US green coffee trader, roaster, and distributor, Coffee Holding Co.
Coffee Holding Co. says higher green coffee costs “proved to be beneficial” in the second half of 2021 | Photo credit: Josh Atwood
Announcing its financial results for the year ended 31 October 2021, Coffee Holding Co. posted revenues of $63.9m, a 14% decrease on the year previous. The company attributed the fall to the impact of Covid-19 on its green coffee customers, many of whom were adversely impacted by hospitality business closures. It also cited the impact of the divesture of its Steep & Brew subsidiary, which saw a decline in sales of over approximately $4m during the period.
However, annual profits grew $2.9m over the period to reach $16m, with Coffee Holding Co. attributing the growth to increased margins on its roasted, branded and green coffee sales in the last part of the year, partially due to the movement of lower cost green coffee inventory built up in previous quarters.
These gains were, however, partially offset by higher packaging and materials costs, the company noted, with freight costs rising 30-40% over the period. The cost of metal for producing coffee packaging had also seen a “dramatic increase,” Coffee Holding Co. added.
“Although higher coffee prices proved to be beneficial to us during the second half of fiscal 2021 as a result of our ability to manage and control our green coffee inventory costs, we were not immune to the same factors impacting costs and the overall economy, including supply chain and inflationary pressures,” said Andrew Gordon, President & CEO, Coffee Holding Co.
“After years of depressingly low coffee prices, this year saw a return to a more traditional coffee market, characterised by wide swings in prices on a weekly basis and an increase in trading volumes with heightened volatility. We believe the higher coffee prices, partly caused by dry weather and a July frost in Brazil, will remain in the near-term, as the market recalibrates the change in the fundamentals of world supply and demand,” Gordon added.
Coffee Holding Co. is a green coffee trader, roaster and equipment manufacturer based in New York, USA. The company controls subsidiaries Harmony Bay, a premium coffee brand, green coffee trader, Organic Products Trading Company, and roasting equipment manufacturer, Sonofresco.
Its retail coffee brands include Cafe Caribe, Café Supremo, S&W Premium, Premier Roasters and Via Roma, which are distributed to foodservice clients and retail locations throughout the US and Canada.