Costa Coffee owner Whitbread may rein back investment following the Leave win in last week’s referendum, while coffee prices could soon rocket due to severe droughts.
Before the EU referendum, Alison Brittain, chief executive of Costa-owner Whitbread, said her company might slash investment plans if the country voted to leave.
Brittain said that businesses and consumers had already started to rein in spending ahead of the referendum. There were plans, as laid out in the company’s recent trading statement, to open about 500 Costa shops across the UK, but this may now be revised.
Prices of robusta coffee beans have started to rise after harvests suffered in Brazil, Vietnam and Indonesia due to exceptionally dry weather. There are worries that this might trigger a worldwide shortage.
The cost of arabica coffee beans has also soared, mainly due to the strengthening of Brazil’s currency.
Market analyst Avneet Deol of Mintec said: “While the weather front has weakened and we expected to end by July, its impact is likely to hamper production for several more months.”
However, total coffee production over the next year is expected to be up 2%, with the arabica crop increasing 9%. Robusta production is forecast to fall by 8%.