- Green coffee prices hit a record $4.41/lb in early 2025 and have remained volatile since
- Specialty coffee faces an identity crisis, as Gen Z consumers trade third wave for customisation
- Private equity & consolidation are reshaping the sector
SPECIALTY coffee is grappling with a record-breaking year on the cost front. Arabica futures climbed to around $4.41 per pound in early 2025 – a level never seen before.
Severe droughts and erratic rainfall in Brazil and Vietnam have triggered a supply crunch, while weather unpredictability has destabilised entire supply chains, both of which continue to pressure the coffee sector in 2025. Lower green-bean supplies and a higher C price have forced roasters to reconsider pricing models, while needing to keep café prices tolerable.
The ripple effects of high prices have touched every link in the coffee supply chain. Roasters are treading carefully, reducing risk by diversifying their sourcing strategies. Meanwhile, access to financing is tightening across the value chain, making it harder for all players to invest or expand. On the production side, many farmers are prioritising efficiency and looking for ways to boost income by offering differentiated or value-added coffees.
Adding insult to injury are recent U.S. tariffs: a sweeping 10% on coffee imports from major producers like Brazil, Ethiopia, and Colombia, with threats up to 46% on Vietnamese beans still looming as U.S. reciprocal tariffs have been suspended, but have not yet been discounted. The coffee sector is fighting for an exemption.
Even large roasters – such as JDE Peets and Smucker’s Folgers – are re-pricing products to account for increased costs, causing stock drops and broader market pressure, facing resistance from major retailers. JDE Peet’s has faced pushback from major European supermarkets over price increases, leading to a standstill in negotiations and affecting its ability to pass on rising raw material costs. In Canada, its biggest grocery chain Loblaw dropped Folgers over price wars.
Roasters and cafés, already facing rising costs in energy and labour, are navigating tighter margins and harder business conditions.
“It’s very clear the specialty coffee industry is at a crossroads,” says Ricardo Pereira, Chief Business Development Officer at Purity Coffee. “And if we don’t work together – truly together – to figure out what we can do collectively as an industry, we’re going to struggle.”
“I’m talking about pricing: how do we move toward de-commoditising pricing for everyone in the supply chain? Why aren’t we working to define roles more clearly – roasters with the power of demand, producers with the power of product, and traders or importers/exporters positioned as service providers who help the industry move forward?”
“If we don’t collaborate, it’s going to be very difficult. It already has been, especially since COVID. Companies that aren’t willing to adapt quickly and efficiently are going to have an even harder time staying alive.”
The identity crisis of specialty
What once felt like a movement – a push rooted in community, crop traceability, and a love of flavour – is now colliding with economic realities.
The specialty wave that began in the 2010s, defined by artisanal roasters and intimate cafés, has shifted. Gen Z, with its $360 billion in spending power, has grown weary of third-wave interiors and minimalist pour-overs, instead gravitating toward Instagram-able matcha lattes, Ube cold foams, and iced coffee drinks laced with lavender syrup.
Convenience, aesthetics, and novelty have trumped microlots. Coffee was the product, but now it’s becoming an ingredient.
Faced with these changing tastes, many specialty players have pivoted – enter “matcha” bars, “cocktail-like” cold brews, and limited-edition blended beverages with seasonal drops.
Roaster profiles and earnings reports tell a similar story: many brands previously fuelled by passion and easy credit are now raising prices sharply or risking insolvency. Others are seeking emergency capital or exploring sale-to-investor routes – even as consumers cut back on eating out and premium drinks.
Gen Z is transforming the third place into part coffee shop, part content studio, for those who can still afford to go out. Many are opting to stay home to save money as inflation continues to pressure consumers, with some home baristas enjoying specialty coffee, but many pivoting towards cheaper options, including coffee concentrate products and instant coffee.
Finally, 2025 also marks a turning point for specialty coffee, with the end of the Coffee Quality Institute’s (CQI) two-decade stewardship of the Q Grader programme, which has certified around 10,000 Q Graders globally. Since the announcement, the sector has remained divided, trying to adapt and understand how and if it redefines specialty coffee.
Consolidation & cash
The industry’s reaction has been swift and muddled. Consolidation, not new in the coffee sector, is now driven by private equity and low-cost financing. Large investors have accelerated acquisitions in specialty, triggered by competition for scale and margin resilience.
Many local artisan roasters and cafés are getting absorbed, forming “collectives” intended to merge craft ethos with investor-backed efficiency. Many smaller-sized green coffee traders, less equipped to handle uncertainty and risk than larger operations, are also feeling the pressure.
This consolidation has mixed consequences. While speculation or outsourced logistics may let giant firms outcompete, many specialty-focused clients, caught in the middle, are facing challenges – some even folding.
Smaller traders and importers face shrinking margins, while larger exporters are using scale to trim costs, speed operations, and overpower specialty supply chains. Niche, established specialty traders can still count on relationships and reputation to stay competitive, but external pressures require at least some adaptation.
The making of a new coffee map
2025 stands at a pivot point for specialty coffee. Climatic chaos and policy pressure have forced prices and unpredictability skyward. Coffee supply chains are navigating a transformational time, where underlying vulnerabilities are being exacerbated.
While it can be argued that high green coffee prices are a long-awaited win for coffee producers, making them price makers rather than price takers, the results aren’t so straightforward. Some may benefit, but most coffee growers aren’t reaping the benefits as they still face high costs of inputs, labour issues, and increased competition. The reality is that high prices are a result of market pressures, not a sustainable transformation of the value chain. Systemic issues still remain unaddressed.
Consumer whims – especially among youth – are steering demand toward fun and familiarity, and the financialisation of specialty through consolidation presents both lifelines and challenges.
In this harsh environment, survival hinges on three imperatives: agile business operations, cultural empathy, and emotional endurance.
Actors who succeed will be those that can reconcile their craft origins with financial resilience, offer compelling experiences rooted in community or creativity, and stay nimble in the face of global disruption.
“We need to sit around the table – together – and ask how we, as a whole industry, can shift this uncertainty,” says Ricardo. “Because there are things we can mitigate if we work as a collective. But that only happens if we’re all truly willing to engage – transparently, intelligently – and make those decisions as a united industry.
This is a call to action. A cry for the industry to rethink how things are done. To stop looking at coffee in a segmented way, and instead to see it as a whole – and work together to build a more resilient coffee future for everyone.”
Coffee Intelligence
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