Why the Cost of Coffee Keeps Rising: What’s Driving the Price Hike in 2025?
The rising and rising…and rising cost of a cup coffee.
Why is coffee so expensive and who benefits the most from the whole situation? These are pretty complex questions to answer, but let’s take a look.
So, coffee is a huge global commodity. Traded on the stock exchange and reportedly the second most consumed beverage worldwide, after tea. Third most consumed drink after tea and water.
The industry is huge and extremely complex…you can find coffee just about anywhere, in just about any form. And each segment of this complex supply chain is getting hit by extremely high prices. From you producer at origin to your local barista. And now; you.
Now, arguably, coffee has always been historically under-priced. When we understand the scale and complexity of the coffee supply chain, it blows my mind that still in some parts of my little corner of France, some restaurants still price their espressos at 1€. Of course, we’re not talking about quality here. Far from it. But still…mind blowing.
Now the largest producer of coffee worldwide still remains Brazil, accounting for more than 50% of all coffee production worldwide.
craftcoffeespot.comA huge market share that was born out of various cultural, economic and agricultural conditions (Large relatively flat surface areas allowing larger volumes of coffee to be produced and processed) And there is even some thought behind why many people prefer chocolatey and nutty flavor profiles as a direct result of ‘Brazilian’ coffee profiles.
And like any commodity it’s all about supply and demand. Like I alluded to before; global coffee consumption is huge, and has indeed been outpacing production for some time. Kind of scary. With the exception of the 2023 / 2024 harvest year that year.
But when the largest coffee producing country in the world announces a difficult harvest year, (remember we’re talking about an agricultural product here so weather conditions play an enormous role). And supply threatens to wane but demand remains high; Boom! price spike. This is obviously a massive oversimplification of the myriad of variables along the way, but that seems to be one of the major players in the state of things. Also we need to understand that, the same cup of coffee also costs much more to produce and to transport this year than last, it even costs more to fertilize and process (as even electricity prices worldwide are soaring).
All these impact us as roasters, producers, importers and consumers.
So everything is more expensive…for everyone. These price spikes have been particular aggressive for those previously working in the commodity coffee space as their rock bottom prices have had proportionally more increases across the board than the already higher end specialty coffees. Personally, I am not convinced that there is any one segment of the chain (coffee shops, importers, producers) that are taking home the lion’s share, but we can make the argument that your large commercial entities who have a hand in all steps in the supply chain are perhaps still the ones smiling the most.
But even huge commercial entities like Starbucks have reported profit losses and subsequent restructuring methodologies, this could both be due to skyrocketing coffee prices all along their immense supply chain, or changing consumer habits. I’m hoping for the latter to be the case.
So what to do?
Well…sadly…I think we need to get used to higher prices. Acceptance is always the first step they always say!
Consuming more deliberately is what I believe to be the future, not just in coffee but in all things. After all, if I’m going to be paying more for my coffee would I not rather that coffee be of higher value at all points in the supply chain? Not only higher pay for producers at origin, but much better quality in cup? (I’ve also found from personal experience that one excellent cup of coffee goes much further than 5 cheap ones).
Coffee is after all, a beautiful and complex product, that can thrill and delight, that can even bring people together.
So, let’s treat it that way.
Find us here: www.leracinecoffee.com
In Good Coffee We Trust
Ross
