Restaurants and cafes have raised their prices, tacking on anywhere from 5 to 20 cents a cup in recent weeks. The escalating price of the popular Arabica bean has affected almost all coffees, from Maxwell House to organic blends.

“I’ve been here for five years, and this is the most significant increase,’’ said Dave Maffucci, a barista for a Peet’s Coffee and Tea in Wellesley, one of five locations the chain has in Massachusetts. Two weeks ago the price of a large cup of joe went up 20 cents to $2.25, a 10 percent jump.

So far, few business owners have reported a decline in sales or a customer backlash. Coffee drinkers, it seems, are a loyal — or addicted — bunch.

“Even during the Great Depression, coffee sales didn’t drop,’’ said Meghan Hubbs, co-owner at Equal Exchange, a West Bridgewater fair-trade roaster and importer that supplies beans to 70 cafes and restaurants in the state and owns cafes in Boston and Seattle.

Some big chains like Dunkin’ Donuts and McDonald’s have been able to hold down prices because they buy in bulk and their size gives them purchasing power.

And in some cases, franchisees absorb the costs.

Clayton Turnbull, who owns 18 Dunkin’ Donuts in Greater Boston, has not raised his prices since the beginning of the year. “We’ve taken a hit and hope we can outrun the trend,’’ he said. His strategy is to lure customers in with other products to offset the increase.

But many coffee vendors have gone with price hikes, another hit for consumers who are already faced with record-high food and fuel costs.

 Read More: The Boston Globe

“Our number one goal, in a time of turbulent commodities, is continuity of supply,” said Ed O’Rourke, Chief Procurement Officer for Dunkin’ Donuts National DCP. “We want to make sure there is no disruption to our product flow—that is paramount. We will focus on remaining below market on commodity positions relative to a given trading range.”

Coffee prices began to rise last summer and coffee futures ended 2010 up 77 percent. Because the DCP had locked in lower prices on the commodities markets, there was minimal impact to franchise owners relative to other foodservice companies. O’Rourke says in 2011 the DCP is shortening the length of its positions on coffee until the market stabilizes, but franchise owners can expect coffee prices to spike 14-20 percent overall.

Many franchise owners we talked with say they have already raised prices on coffee. “There is a need for us to pass on some cost because we have to recoup some of the additional expenses that are being incurred. At the same time we have to be careful how much we raise prices given the economy and time of the year,” said Vishal Shah, a Chicago franchise owner and member of the Board of the Midwest DCP. He admits few customers have complained about the additional dime his stores now charge for coffee.

In response to the concern franchise owners have over commodity prices, late last year the National DCP prepared a detailed commodity outlook for members in all regions. Armed with the data, franchise owners are left to decide how much they can increase prices without losing too many customers.

Because of the lagging recession, some customers have already cut back on discretionary expenses, like coffee and a snack. Franchise owners are hoping die-hard customers won’t be turned away by an additional five or ten cents for a cup of coffee.

Starbucks has responded to commodity increases by raising its prices; so far McDonald’s has kept prices fairly steady. Experts believe because coffee is not a core business for McDonald’s, the company can use coffee as a loss leader as a way to increase market share.

While not as dramatic as coffee, the sugar market has also experienced some recent turbulence. At the end of 2010, sugar prices had surged 19 percent although prices have come down a bit in January. The National DCP is projecting sugar to increase 8-10 percent for 2011 with some price easing in the third quarter.

David Patel, another Chicago franchise owner and Midwest DCP Board member, believes the National DCP’s projections are on target and, he says, franchise owners were sheltered from losses by the DCP’s commodity positions in 2010. Still, the situation is unnerving.

 “I haven’t seen prices go up this much before. It’s definitely going to impact franchisee profits in 2011,” Patel said.

Production shortages have seen the cost of sugar nearly triple in the last year, flirting with 30 cents US per pound in comparison to the 11 cents at which it formerly hovered. Analysts predict things will get worse before they get better, with potential price implications for everything from donuts to candy bars.

Misty Harris in Canwest News Service writes that Canadians with a sweet tooth may soon find cavities in their wallets as sugar prices soar to their highest level in three decades.

Production shortages have seen the cost of sugar nearly triple in the last year, flirting with 30 cents U.S. per pound in comparison to the 11 cents at which it formerly hovered. Analysts predict things will get worse before they get better, with potential price implications for everything from cupcakes to double-doubles.

“I think we’ll be going through most of 2010 at abnormally high levels,” says Edward Makin, president and CEO of Lantic, which represents more than half of Canadian sugar sales. “The 30-cents level we touched last week was probably justified, and we’ll likely go even higher.”

Sandra Marsden, president of the Canadian Sugar Institute says long-term contracts have helped limit the exposure of many retailers and food processors to the latest sugar swings. But until the predicted return to surplus in 2011, individual manufacturers and smaller businesses will have to either hold the line at lower profits or start passing costs along to consumers.

If prices stay as high as they are now — or worse, climb higher — Lantic’s Makin says companies of every size will face that same decision.

“With things like this, you’re best to keep your head down and hope it all goes away. But I don’t think it’s going to do that any time soon,” says Makin, noting that he wouldn’t be surprised to see sugar trading in the mid-thirties over the next several months.

Already, the price of bags of sugar at grocery stores has risen with the fall in production, which was caused by unfavourable weather in India and Brazil. And across the country, bakeries — many still recovering from the record wheat prices of recent years — are preparing to raise the price of their goods.

“We’re definitely at the point where we have to increase prices by five to 10 per cent,” says Lori Joyce, co-founder of the Cupcakes franchise in British Columbia. Although the bakery chain won’t implement changes until after the Olympics, the fear that Canadians will presume price-gouging still looms large.

“I’m really nervous,” says Joyce. “The consumer just thinks retailers are getting greedy . . . This (situation) forces us to look like the bad guy.”

Even an organization as embedded as Tim Hortons isn’t immune to sugar shock, with coffee and doughnuts having been subjected to price increases of about five cents each late last year.

“High sugar prices have increased the cost of business for our local franchisees. In fact, franchisees have been hit from several directions, dealing with increased labour costs and commodities, such as coffee and dairy products,” says David Morelli, director of public affairs for Tim Hortons.

For competitive reasons, the company isn’t tipping its hand to this year’s pricing strategy. But if industry predictions are correct, Canadians who enjoy a good sugar fix should start fattening up their piggy banks now.

Canwest News Service