- Coffee prices have remained high and volatile since Brazil’s 2021 frost
- Arabica prices peaked at $2.75 in September 2024 – roasters are holding off on premium buys
- The expected price drop? Unlikely to happen soon
HIGH coffee prices, stubbornly sustained over the last two years, are emerging as a lasting reality for the coffee industry. Since late September 2023, coffee prices have been on a sharp upward trajectory.
The Arabica futures contract reached levels in September 2024 not seen since August 2011. The price of $2.75 per pound recorded on September 26 marked a 46% increase since the beginning of the year and an impressive 91% jump from the same time last year.
But while buyers and sellers alike have been hoping for prices to stabilise, recent surges show no sign of a meaningful drop.
For coffee shops and roasters, this new economic environment is shaping not only what’s on offer but also how coffee is purchased and consumed.
Since Brazil’s frost in 2021 wreaked havoc on coffee crops, coffee prices have remained resiliently high. Coffee prices surged nearly 13% in response to the frosts, reaching a six-and-a-half-year high at the time. The Brazilian frost severely impacted Arabica coffee production, leaving the market under-supplied at a moment of peak demand.
To make matters worse, weather-related disruptions continue to pile up. Further dry spells are happening in Brazil – the nation’s worst drought in more than seven decades. In Vietnam, Robusta yields are declining because of heat and drought – with the price of Robusta coffee nearly doubling since early 2023. Unpredictable conditions are also increasing in coffee-producing regions like Colombia and Ethiopia.
Potential supply shortages in these countries, especially Brazil and Vietnam, have been driving up global coffee prices. Logistics issues due to the global supply chain crunch during and after the pandemic have added further strain.
The result has been a sustained squeeze on traders, coffee shops and roasters. Specialty coffee businesses, already running on tight margins, are struggling to absorb costs without passing them on to consumers.
“Since prices peaked in 2021, sourcing coffee has become challenging,” says Sergio Avilán Britto, a coffee consultant.
“Previously, much of specialty coffee was 84-point coffee, priced well above the C Market. As prices rose, however, specialty coffee prices have inched closer to commercial levels, forcing roasters and importers to either cut margins, raise prices, or compromise on quality, sometimes turning to larger, more commercial coffee sources, like cooperatives.”
The high costs are reshaping the specialty coffee landscape, forcing some smaller shops to consider either narrowing their offerings or pivoting to commercial blends to stay afloat. Despite these shifts, the anticipated price drop has remained elusive, leaving many businesses to navigate a new world of high costs with no end in sight.
Adjusting to high-cost coffee buying
This shift in coffee economics has inevitably trickled down to how coffee roasters approach purchasing.
Historically, specialty coffee roasters have sought out premium lots, often scoring above 84 points on the grading scale, to capture unique flavours that command a premium with consumers. But with high-grade coffee now carrying an especially high price tag, many roasters are reconsidering their buying habits.
Instead of focusing on fancier, higher-scoring lots, they’re turning to more affordable, yet still quality, coffees in the 80-83 scoring range. These “regular” specialty coffees allow roasters to maintain quality while managing costs – a delicate balance in a price-sensitive environment.
The resulting shift has caused ripples across the specialty coffee trade.
Producers, traditionally incentivised to chase higher scores with their coffee lots, now see reduced demand for ultra-premium grades. Many farmers have therefore been gradually scaling back on high-investment practices aimed at achieving top scores. Instead, they are focusing on “good enough” specialty coffee that meets quality standards but is less costly to produce.
“Exporters are now pressured to handle a higher volume of microlots, which is often unrealistic, or to buy at market rates since many roasters can’t pay a premium,” says Sergio. “In Colombia, there’s a notable shift toward processing stations where intermediaries can buy cherries at competitive rates, process them to increase quality, and access better markets.”
Some specialty coffee roasters are even establishing commercial divisions to diversify their product lines and cater to budget-conscious markets, a trend that may ultimately blur the lines between specialty and commercial coffee sectors.
“I believe we’re already seeing many of the bigger players shifting to lower scores and more traditional ways of purchase,” says Sergio.
“And I believe many are to follow. Specialty coffee remains viable as long as the C Market price is low, as the 30-60 cents per pound premium genuinely adds value. However, once it surpasses $2.50 per pound, few companies can absorb the resulting cost structure. At that point, businesses must either reduce their margins, raise consumer prices, or become more flexible with their raw materials.”
This shift not only reflects the economic pressures roasters face but signals a recalibration of the premium coffee landscape as roasters and producers adapt to survive.
A price plateau or a new reality?
Despite hopes that coffee prices would eventually stabilise, industry leaders suggest that these elevated prices may be here to stay, at least in the near term.
Several factors point to a prolonged period of high costs. Climate unpredictability remains a key risk for coffee-growing regions, with rising temperatures, erratic rainfall, and extreme weather events posing continual threats to supply stability.
Additionally, labour shortages in coffee-producing regions, coupled with rising costs of fertilisers and transportation, have compounded the difficulty of lowering coffee prices.
For coffee buyers and roasters who have held off on large purchases or waited for prices to drop, this could mean a change in strategy. Instead of waiting out the market, businesses may need to find ways to adjust permanently to this higher-cost environment.
Some roasters are exploring direct trade relationships with farmers to cut out intermediaries and secure more stable prices, while others are expanding their product lines to include blends that mix lower-cost coffees with specialty beans.
For consumers, this could mean fewer choices of high-end coffees or a rise in more accessible specialty blends as shops and roasters find ways to balance quality and price. As high coffee prices appear less a temporary challenge and more a fixture of the coffee market, the impact on specialty coffee culture is undeniable.
Cafes may become more selective in their offerings, while roasters lean toward diversified, flexible portfolios. Ultimately, consumers may find themselves choosing between pricier premium cups or more economical blends.
High prices also need to be considered in a context of inflation. The Specialty Coffee Transaction Guide highlights that the US Consumer Price Index has risen 43% since January 2011, for example, meaning that price rises in the same time frame must be adjusted.
“It’s unreasonable to think products can be indefinitely cheap or fixed, as everything else is more expensive,” says Sergio. “If we factor in inflation, coffee prices are significantly lower than years ago, which means even though they seem high, the lifestyle of producers is much higher.”
“Everyone’s groceries go up, everyone pays more rent each year and everyone experiences inflation on a daily basis, but to compensate, salaries usually go up. Why shouldn’t that be the case for coffee producers – and all agricultural workers around the world?”
Apart from finding ways to keep coffee affordable and margins decent, some advocate for a shift in how consumers and the industry value people and products – possibly having consumers absorb more of the price increase.
“As an origin country we are definitely working to increase the perception of value for coffee around the world,” says Sergio. “Roasters and importers should adapt their prices and be willing to pay more and hence, charge more for those coffees, a responsibility that has to be passed down to the consumer in the end.”
While the specialty coffee sector has long prided itself on unique flavours and stories in every cup, it now faces a different story: one of resilience, adaptation, and a high-price reality that may, ironically, reshape the industry’s identity in lasting ways.
Coffee Intelligence
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