- Sensationalist coverage of coffee pricing reduces a complex issue to how much a single cup of coffee costs, obscuring the commercial realities behind it.
- UK coffee prices have risen around 35% in the last five years, while green coffee and business electricity costs have risen by around 60%.
- Poorly contextualised pricing debates can make sustainable pricing harder, pushing coffee shops towards tighter margins or cheaper products.
Whenever the cost of coffee rises, the same headlines tend to follow. Consumers are warned about “$12 coffees“, record coffee prices and the possibility that their daily cup could soon become a luxury. These stories are effective precisely because the price of coffee is something almost everyone understands.
What they often fail to communicate is everything sitting behind that number. The retail price of a coffee reflects green coffee, labour, rent, milk, energy, equipment, tax and countless other costs accumulated throughout the supply chain. Recent volatility has only added further pressure, with climate disruption and rising operating costs affecting businesses from producers through to coffee shops.
The problem is not that coffee prices are making headlines. It’s that the conversation too often ends there. By reducing an increasingly complex supply chain to the price of a single cup, sensationalist coverage risks distorting public perception and making it even harder for coffee businesses throughout the supply chain to price their products sustainably.
Why coffee gets scrutinised
Coffee occupies an unusual position in consumers’ lives. For millions of people, it is not an occasional hospitality purchase but an everyday ritual. That familiarity means customers often know precisely what their regular coffee costs – and notice immediately when that price changes.
Pierre Tymms is the Co-Founder of Nordic Brew Lab in Sweden. He believes the high scrutiny about coffee pricing is partly due to the fact that coffee continues to be viewed as a functional commodity, even as specialty consumption grows.
“While the specialty coffee industry is going through a very interesting maturation process, with more and more consumers making the switch to specialty, coffee overall is still seen as a commodity,” he says.
Combine that perception with intense competition between multinational chains, independent coffee shops and owner-operated businesses, and raising menu prices becomes risky – and the fear of alienating customers remains one of the biggest barriers to charging more.
Coffee is also consumed differently from many other hospitality products. Consumers might respond to higher restaurant or wine prices by going out less frequently, but they may be considerably less willing to abandon their daily coffee.
“For many consumers, coffee is a functional product. They buy coffee to wake up or stay alert, compared to something like wine where consumers are in a more social and ‘happy’ mentality,” Pierre says.
“Funnily enough, the most ‘fair’ pricing I’ve seen for coffee has been at fine dining restaurants where coffee for $10+ doesn’t get questioned by the consumer.”
That combination of habit, visibility and perceived simplicity makes coffee unusually sensitive to price changes. But the problem is not simply that consumers notice what they pay – it is that prices are often criticised without the commercial context needed to explain them.
The wrong conversation
This sensitivity makes coffee particularly suited to attention-grabbing coverage. Headlines warning that a cup “could soon cost $12” or describing everyday coffee as “overpriced” turn a complicated economic story into something consumers can immediately react to.
The stories that dominate public discourse are, more often than not, the least helpful ones. A dramatic retail price is far more likely to capture attention than an explanation of green coffee volatility, wage increases or shrinking coffee shop margins. Yet those less visible pressures ultimately determine what consumers pay.
The economics can be surprisingly unforgiving. The average latte across UK coffee chains is now £3.76, up 35% in five years. Over a similar period, the ICO’s benchmark green coffee price and average non-domestic electricity costs in the UK have both risen by around 60%.
Pierre believes price-focused stories have an obvious appeal because they force consumers to take a position.
“These articles perform well because they polarise the audience and make the consumer choose a side – either support the supply chain from top to bottom and accept a higher price, or look for cheaper alternatives,” he says.
“It’s important for cafés who genuinely want to serve great coffee to attract the former consumer base, and be ok with losing the latter,” Pierre says.
That framing can have consequences beyond public perception. If coffee shops believe customers will reject higher prices, they must either absorb rising costs or find savings elsewhere. For some businesses, that means buying cheaper coffee.
Pierre says he has seen coffee shops choose lower-quality beans to maintain existing prices and margins rather than explain why prices need to increase. In that sense, sensationalist coverage of coffee prices can ultimately work against the quality and sustainability consumers expect from the industry.
“Competition is fierce, especially in more established coffee markets, which puts a downward pressure on pricing,” he says. “My perception is that many café owners would rather buy cheaper coffee than raise their prices, which is not good for the industry as a whole.”
Context matters
The responsibility does not sit solely with the wider public conversation. Branding coffee as ‘specialty’ is no longer enough to differentiate it from cheaper or commodity coffee and validate higher comparative pricing.
Pierre argues that coffee shops need to understand the role they play in customers’ lives and demonstrate value through product quality, service and the overall experience.
In short, they need to explain what customers are paying for, aside from a cup of coffee.
“People get more than just a cup of coffee when they buy coffee – they get friendly, familiar service, a nice atmosphere to sit in and enjoy, and the most important is the quality that meets or exceeds expectation,” he says.
“Of course communicating the value of the product is important too, but the term “specialty coffee” is overused and not enough to justify a higher price in today’s market.”
There are consequences if the industry avoids that conversation indefinitely, or tries to introduce price changes gradually. Smaller, yet more frequent price increases may provide less of an initial shock to consumers, but prove more damaging in the long-term.
Pierre believes that businesses ought to be more confident about price increases and use them as an opportunity for education, rather than delaying them until margins become unsustainable.
“I think small pricing jumps feel less intrusive but can frustrate regular customers if they happen too often, whereas a bigger adjustment is going to require some form of extra perceived value for the consumer,” Pierre says.
“If a business wants to make a bigger adjustment it’s the perfect time to bring in a new higher quality coffee and be able to stand behind the adjustment and also educate the consumer at the same time.”
Coffee shops that stand behind quality can attract customers prepared to pay for it, even if some price-sensitive consumers choose to go elsewhere.
“Some customers might leave, but I believe the right kind of customer will stay and become a bigger fan of the business.”
Coffee does not need protection from scrutiny, nor should consumers stop questioning what they pay. What the sector needs is context – a better understanding and representation of not only what goes into the cup, but of the actualities of operating the businesses that prepare and serve it.
Constant sensationalism about the cost of a cup may generate clicks, but that’s where the benefit ends. It does little to explain the commercial realities behind that price – and worse, it can make sustainable pricing more difficult for the very businesses consumers expect to deliver better coffee, pay people fairly and invest in quality.
The price on the menu is worth discussing. It just shouldn’t be where the conversation ends.
