A complex web of pressures, from climate change to tariffs, are pushing up coffee prices. But the industry has a challenge: How to communicate necessary price rises to consumers without scaring them off.
For paid subscribers: deleted scenes from last week's lexicon. Musings on the words "Sustainability", "Specialty", and the old-school buzzwords like "Artisan" and "Gourmet".
A complex web of pressures, from climate change to tariffs, are pushing up coffee prices. But the industry has a challenge: How to communicate necessary price rises to consumers without scaring them off.
It’s not hard to see why. The rising cost of green coffee has been in the newsa lotover the past few years, and in general, media coverage of coffee price rises tends to emphasise their impact on consumers. For example, see a 2021 piece in Bloomberg entitled “The Price of Your Morning Cup of Coffee Keeps On Rising”.
There are myriad disparate reasons for these price spikes, from inflation to supply chain disruptions to the climate crisis impacting harvests worldwide, all of which have come together to put upward pressure on prices. Most recently, in the United States, a chaotic and ever-changing series of tariffs put in place by the Trump administration has added new costs to imported coffee, which companies are already passing on to customers.
These rising prices are “testing consumer patience”, the Financial Times reported in April, citing Antonio Baravalle, CEO of Lavazza—a company that saw a 20% increase in annual profits and a “record” $3.67 billion in revenue in 2024. Baravalle noted that Lavazza chose to “partially absorb the cost of raw materials”, although it did still push through three price rises in 12 months.
Big coffee brands are always looking to charge more—the CEOs of both J.M. Smucker and JDE Peet’s called coffee “a pass-through category” on recent earnings calls, referring to the practice of sellers passing cost increases on to the buyer. Even if their sales decline as a result, higher prices often make up for that reduction. As Rabobank analyst Jim Watson noted in a 2023 report, Folgers’ “absolutely massive” price hikes made up for a decline in volume, resulting in sales “well-above their long-term trend”.
It is a lot harder for a small coffee shop, on the other hand, to keep raising prices without potentially pissing off its target market and losing customers. In a 2024 Guardian article, journalist Sirin Kale interviewed numerous small business owners in the U.K. who were struggling to keep going under the never-ending upwards pressure. “If I raise my prices, hoping to get more revenue, am I shooting myself in the foot, because you’re not coming in as frequently?” asked Bogota Coffee Co. co-owner Paul Ashby.
This problem isn’t about to go away—coffee shortages and climate pressures have been, and remain, long-term concerns, even before tariffs enter into the equation. Additional price hikes are therefore pretty much inevitable.
But explaining the reasons for these rises—and justifying the added cost of specialty coffee—has traditionally been challenging for the industry. Able to buy cheap coffee from a vending machine, diner, or chain drive-thru, consumers often expect specialty coffee to be, if not the same price, then similar.
The way things are heading, communicating the benefits of better coffee—be they taste, experience, or ethics—without scaring off customers will be one of the primary challenges facing specialty coffee businesses for the foreseeable future.
Confusion, Fear, and Symbolic Attributes
If you stop to consider the number of hands it passes through before it reaches your cup, it’s staggering that coffee is as cheap as it is. But as with everything else, there’s a reason coffee is so cheap. As it turns out, that low cost is subsidised by producers: The majority of farmers don’t earn enough to live comfortably, and many live in poverty. Studies have shown that there is enough value within the industry, but as I have written before, the bulk of the coffee industry’s profits stay on the consuming end, siphoned off through executive remuneration and dividend payments.
Coffee’s labyrinthine, globalised supply chain means that external shocks can easily impact prices. That was true before Trump decided to instigate a trade war—see how shipping bottlenecks in 2021 caused a spike in coffee prices—but the tariffs have added another level of complexity and sparked their own new round of cost increases. Many American specialty coffee businesses have already started to raise prices in response, with Chris Kornman from the importer Royal Coffee calling the situation “an unprecedented crisis” for the coffee industry.
“I think the general sentiment is just some confusion and some fear and anxiety”, says Erica Escalante, a cafe and bakery consultant who works with small companies across the U.S. “I don’t think anyone really understands what tariffs are going to mean for their business”.
One unique aspect of the tariffs is that—with the current 10% rate on every country—they will affect every company equally. “It doesn’t matter if you’re Folgers or Onyx ... you’ll still have 10% tariffs on that Colombian coffee”, says Spencer Ross, a coffee researcher and associate professor of marketing at UMass Lowell’s Manning School of Business.
The difference is in how companies communicate the reasons for price rises to their customers. For those buying coffee from Folgers or J.M. Smucker, which don’t necessarily talk directly with their customer bases, the first indication of a change will be in the coffee aisle at their local supermarket. And because the multinationals compete mainly on price, the consumer decision is relatively binary: Is this bag cheaper than that bag?
For independent or specialty coffee companies, which differentiate themselves with less quantifiable values—factors like quality or experience, which Ross refers to as “symbolic attributes”—their customer base has a different perspective on price rises.
To illustrate, Ross uses a hypothetical company and asks why people might choose to buy from it: “Is it because of the brand? Is it because of the stories they’re telling? Is it because of the packaging? Is it because of the cool T-shirts they’re selling? All these things are symbolic attributes of the coffee brand that consumers pay for”.
A patron might visit a specialty coffee shop primarily for the atmosphere or the customer service—aspects that are less linked to the price of the drinks they buy—and can therefore justify paying extra to keep receiving those same experiences. “Because specialty coffee tends to overlap the symbolic with the product quality, their target market is a bit less sensitive to spending when the product quality is the same”, Ross says.
That means specialty coffee companies may have some leverage to raise prices—but there isn't one agreed-upon roadmap. Escalante notes that, while some roasters have been raising prices, many cafes she works with are trying to wait things out for as long as possible. But she also says that it’s important for owners to have a plan.
“As I always do, I highly, highly recommend cafe owners need to price out their menu in a way that is easily updated over time”, she says. “I meet so many cafe owners who have never done so, and it’s a vital task that will ensure their menu is priced for profitability”.
Both Reasonable and Necessary
These price rises are not just happening in the United States. In December, the Brazilian Coffee Industry Association warned that prices for retail coffee in the world’s second-largest coffee-consuming country could rise in light of the commodity market surge. Korea’s usually low-cost chains have started raising prices, frustrating their customers. And in Europe, the Swedish tradition of fika is allegedly at risk because of rising coffee prices, as is Italy’s historically cheap espresso.
In Australia, the conversation around coffee’s worth has been happening for years. Beau Donelly wrote about rising coffee prices for The Sydney Morning Herald in 2014, while Trevor Paddenburg reported on a particularly pricey flat white for PerthNow a year prior. (The latter story featured one Facebooker commenting “See you in hell” underneath a picture of the offending receipt.)
If anything, that conversation has only intensified in the years following 2020, as pandemic-era supply chain disruptions and soaring costs continue to drive the average coffee price up (as of 2025, prices in Australia have risen nearly 40% from 2019 levels). Multiple recent news reports mention the possibility of a flat white costing AU$10 (about US$6.50 or £4.80) by the end of the year.
Abdullah Ramay, CEO of Sydney-based specialty roaster Pablo & Rusty’s, is skeptical that such a leap will happen. “A $10 flat white is not going to happen soon, maybe only in certain contexts”, he says. “Maybe for a rare coffee, or with extras and add-ons”.
However, Ramay also thinks that coffee prices in Australian cities have been too low for a long time, and has been vocal on the subject for several years. “Why shouldn’t Australian cafes value their work, their teams, and their customers the same way cafes overseas do?” he asks. To combat the perception that Australian coffee is overpriced, his company has released data showing that coffee in comparable cities around the world is sometimes double the cost compared to places like Sydney or Brisbane.
Josh Walker, head roaster for Villino Coffee in Tasmania, agrees. “Honestly, I think Australian coffee is probably actually underpriced at the moment”, he says. “It’s a really hard business to make work, and I think coffees need to get to that $6–7 mark before you start seeing much return on investment”.
Walker and Ramay both say their companies have been working to communicate this need to customers, with Ramay noting that increased media coverage of the topic has helped. “It gets people thinking about what their coffee is really worth, and why small increases are both reasonable and necessary”, he says. “The industry is finally leaning into this conversation properly. That’s a good sign”.
Degrow Your Coffee
Even as world coffee production strains under the weight of simultaneous stressors, demand continues to climb. Coffee consumption increased 3.4% worldwide between 2018 and 2024, and is expected to continue rising over the next few years. The parallel growth in demand and decline in coffee supply was a big reason for the commodity price surge of 2024.
While rising commodity and retail prices are good for some coffee farmers, they don’t benefit all. Producers’ income may have grown in some instances, but the cost of production has also increased, and the value that makes it back to the farmer is still proportionally miniscule.
The rise in popularity of low-cost coffee companies like China’s Luckin and the United States’ Blank Street—and consumer criticism of prices at both chains and specialty cafes—shows that the majority of people still prefer cheap coffee. But if we want coffee to continue to be viable into the future, then something will need to change. You can’t have endless low-priced lattes and a functioning industry (or, for that matter, a liveable planet).
Catherine Franks of Steampunk Coffee Roasters in Scotland has another idea. She recently wrote a blog post on the topic of rising prices, putting forward a somewhat radical proposal for the owner of a coffee company: Maybe drink less coffee?
“I believe that we in the Northern Hemisphere need to consume less and be much more deliberate and conscientious when we do consume”, Franks says. “When it comes to coffee I think we can still enjoy all of the really great things about specialty coffee—the taste experience of course, the sociability of having a coffee with a friend, the fun experimental geekiness of playing with brewing—and we can do all of these things in a way that reduces our consumption”.
Like other small coffee businesses, Steampunk has tried to weather the many storms that have battered the industry in recent years, implementing price rises only when necessary. Franks’ appeal to her customers is to consume “carefully and intentionally”, even if that means buying less from her own company.
She also has a word for the wider coffee sector: “Perhaps as an industry we should focus our efforts on making ourselves more sustainable and trying to rebalance the supply chain with profits travelling back to producers, rather than trying to sell more stuff to customers”.
Confronting Coffee’s Growth Fixation
The $10 flat white and the £10 latte are probably inevitable. Once they have been raised, retail prices for most products don’t tend to come down again. Inflation will continue, coffee production is still threatened, and the global economic and political situation is, shall we say, volatile.
Meanwhile, coffee remains undervalued. As Ramay points out, even today’s prices are not high enough to ensure everyone in the coffee value chain is paid fairly.
Perhaps the answer is, as Franks suggests, to reduce our consumption while ensuring workers along the supply chain are fairly paid for what we do consume. The drive for eternal growth at all costs continues to engulf the coffee industry. CEOs lose their jobs for failing to deliver positive year-on-year revenue increases, and our trade bodies champion upwards-trending demand.
But, as is true of capitalism more widely, infinite growth is a deadly myth. As the author and essayist Edward Abbey noted, “Growth for the sake of growth is the ideology of the cancer cell”.
If coffee is to continue to thrive, delivering benefits for producers, workers, and consumers, we will eventually have to confront this reality. Until then, those in the business of better coffee will need to navigate thorny questions of price rises—and the challenge of getting customers on board.
I'm the creator and writer of The Pourover. Based in Scotland, I have over a decade of experience in the specialty coffee industry as a barista, roaster, and writer. Ask me about coffeewashing.
The past year of climate shocks and surging coffee prices has felt portentous. Without significant investment and industry cooperation, coffee’s future seems increasingly uncertain.
Coffee brands love to tout their ethics and human rights policies, yet the supply chain is still built on poverty. At some point, we have to judge the industry not by what it says but by its actions.
