There Was a Reason for Raising Only Latte Prices... Mixed Reactions to Dessert Amid Milk Cost Increase

Prices Rise Sequentially for Latte, Fermented Milk, Fresh Cream, etc.
Some Companies Exclude Price Hikes for Americano and Others
Self-Employed Fear Taste Changes if Switching to Cheaper Products
"Milk and Eggs Have Short Shelf Life, So 'Stockpiling' Is Impossible"

[Image source=Pixabay]

[Asia Economy Reporter Moon Hyewon] #A, the owner of a dessert cafe in Eunpyeong-gu, Seoul, recently experienced an increase in customers buying cakes due to the Christmas and year-end peak season, but she cannot be entirely happy because the cost of ingredients has risen significantly. Whipping cream, which used to cost about 6,600 won per pack, has now increased to 9,000 won, adding to her burden. A said, “Orders for fresh cream cakes are increasing during the year-end peak season, but if I switch to cheaper cream, customers quickly notice the change in taste and complain. On the other hand, if I raise prices, the word of mouth turns negative, so I am reluctantly enduring by purchasing expensive ingredients as they are.”

With the price of milk rising ahead of the Christmas and year-end peak seasons, the burden on self-employed business owners who sell bakery items like cakes or latte beverages is increasing. Not only milk but also the prices of raw milk used in cheese, butter, and ice cream have risen simultaneously, causing an overall increase in food prices, a phenomenon known as ‘milk inflation,’ raising concerns about the burden of price hikes on consumers.

According to the industry on the 18th, Seoul Milk Cooperative, the industry’s top seller, raised the prices of milk products by an average of 6% starting from the 17th of last month. The price of 1000ml of white milk increased by 6.6%. Maeil Dairies also raised its shipment prices on the same day, increasing the consumer price of its representative white milk product, ‘Maeil Milk 900ml,’ from 2,610 won to the 2,800 won range at large supermarkets.

Earlier, the Dairy Promotion Board raised the basic price of raw milk by 49 won per liter (ℓ) starting from October 16.

As milk prices rise, products such as lattes and fermented milk are also increasing in price in a chain reaction. Ediya Coffee decided to raise the prices of 57 products, excluding Americano and espresso, by 200 to 700 won starting from the 22nd, among which about 40 products contain milk.

The domino effect of price hikes in the dairy industry is leading to increased pain for self-employed business owners. Individual cafes that mainly procure milk from dairy company dealerships are more vulnerable to this milk inflation than large franchise cafes that sign bulk contracts.

Citizens visiting the '2022 Cafe and Bakery Fair' held at KINTEX in Goyang-si, Gyeonggi Province, on October 6th are looking around the booths. Photo by Kim Hyun-min, Goyang. kimhyun81@

Following the rise in milk prices, egg prices have also surged recently, intensifying inflationary pressure. Like milk, eggs are also important ingredients in making desserts and bakery products. According to the Livestock Products Quality Evaluation Institute’s Livestock Distribution Information on the day, as of the 12th, the nationwide average consumer price for a carton of eggs (30 special eggs) was 6,738 won, about 20% higher than the average of 5,547 won. Compared to 6,090 won a year ago, it rose by about 10%.

B, the owner of a cafe in Gwanak-gu, Seoul, said, “Milk, fresh cream, and eggs have short shelf lives, so ‘stockpiling’ was impossible. We are considering removing whipped cream served on top of drinks, reducing latte menu items, and stopping the sale of bakery products after the year-end peak season.”