If you’ve seen your coffee prices going up, you’re definitely not the only one. The coffee market around the world has been a bit shaky lately, with prices going up because of things like weather changes and issues in the supply chain. This update explains what’s going on in the industry and shares some practical tips for handling these increasing costs.
We reported in December about global coffee prices escalating to new highs.
The “C” price reached $3.50 in December 2024. Up from $2.409 on July 18, 2024.
There are many factors that affect the price of coffee. Weather reports in Brazil, the largest coffee producing country, expect rainfall to be lower than average, affecting the expected 2025/2026 crop harvest. Furthermore, recent data shows that green coffee exports from Brazil dropped 17.1% year-on-year.
Many origins of coffees, once widely available, are in short supply or not available. We are uncertain about what changes to US trade policies may have on the price of coffee, nearly all of which is imported into the US. Additionally, the cost of our labor, insurance, property taxes and other costs have continued to increase.
The National Coffee Association (NCA) recently released a statement saying,
Our messages will make clear that there is no way to supply the U.S. coffee market with domestically grown coffee and that tariffs on coffee would likely have immediate cost consequences for the 70% of Americans who drink coffee each week, making an extremely noticeable impact on their daily lives and threatening coffee businesses that drive economic activity in every U.S. state and territory.
We have tried to utilize our existing coffee contracts and shorter-term contracts to mitigate the short term and rapid increases, but as the Brazilian crop estimates continue to dramatically decrease and prices remain high and projected to go higher, we are forced to increase our prices. This is not a matter taken lightly since we know all Americans have been battered by inflation.
Quality coffee, though more costly, is an affordable luxury, if not a necessity, for most people. Even though these increases are large on a per pound basis, they are small on a per cup basis. Thinking the price of coffee will remain at these levels through 2025 and into 2026, we are now fixing short term contracts based on origin to help mitigate the daily fluctuations in price or availability. We hope that this brings additional stability to the prices we charge you.
Evaluate all your cost inputs and local competition to ensure you are charging enough to cover your increased labor, overhead, dairy, taxes, insurance and other costs.
16oz of ground coffee generally yields 273oz of brewed drip coffee. That yields around 21 to 23 servings of 12oz cups of coffee. Therefore a $1.00 increase in the cost of coffee per pound only increases your cost from $0.52 to $0.56, or $.04 per cup.
If you currently sell your drip coffee for $2.50 per 12oz cup, changing that to $2.55 makes up for the increased cost to you, and is indiscernible to your customers. A store operator may want to increase the price of the cup further to help cover their additional overhead costs.
It also might be time for an equipment recalibration to ensure you’re using the correct amount of coffee. Is your equipment in tip-top shape? Are your brewers and dispensers clean and holding temperature? Are your grinder burrs in good shape grinding your coffee precisely? All of these things will affect how much coffee you’re using in your recipes.
Is your staff knowledgeable about the challenges in the coffee production lands and how hard your shop and your roaster work to ensure top quality coffee for the daily brew? It's important to help educate your customers on the challenges faced with coffee production and what your shop and team are doing to help produce the best possible cup while controlling your costs.
It also might be time for an equipment recalibration to ensure you’re using the correct amount of coffee. Is your equipment in tip-top shape? Are your brewers and dispensers clean and holding temperature? Are your grinder burrs in good shape grinding your coffee precisely? All of these things will affect how much coffee you’re using in your recipes.
Is your staff knowledgeable about the challenges in the coffee production lands and how hard your shop and your roaster work to ensure top quality coffee for the daily brew? It's important to help educate your customers on the challenges faced with coffee production and what your shop and team are doing to help produce the best possible cup while controlling your costs.
Coffee prices have their ups and downs just like the industry, and 2025 brings a mix of challenges and chances to grow. By planning wisely and keeping things efficient, businesses can not only handle these changes but also position themselves for lasting success. Staying aware of market trends and being flexible will be important as we continue on through the year.
As always, we’re here to help! Please reach out to us with any questions about how we can mitigate increased costs to your business.
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