News & Opinion
For much of the past three years, commodities have been making headlines: coffee prices “soaring,” cacao facing “structural collapse,” and olive oil becoming “liquid gold.” Each spike is framed as a crisis. Olive oil prices in parts of Europe increased by 130% from 2022 to 2024. Coffee and cacao have also hit multi-decade highs in recent years – yet consumption has largely stabilised as shoppers adjust. Crisis headlines turn staples into talking points, reinforcing ritual and value as much as they spark outrage.
Looking back, specialty coffee has long defined itself by what it has rejected. For a long time, table service was out and queues, counter ordering and a studied informality were in. The barista was central to the third wave experience. To be served at the table would have broken that intimacy and, worse, made coffee feel like dining. As coffee prices rise and home brewing improves, cafés are under pressure to justify the outing. In many cities, a flat white now costs as much as a glass of wine, shifting value from product to experience. Service is becoming the differentiator – 78% of millennials prefer spending on experiences rather than goods.
Against a background of global chaos, coffee industry news lately has been fairly predictable. The same stories recur: sustainability certifications, modest price rises, cautious store openings, incremental equipment upgrades. The industry is busy – but rarely surprising. Consolidation and cost pressure have made coffee cautious. Food giants spend just 0.4% of revenue on R&D, preferring acquisitions to experimentation. With coffee prices up 20%+ in the US since 2020, consumers are simplifying orders and sticking to familiar brands.
Convenience has long been at the heart of America’s single-serve coffee market, with Keurig’s K-Cup system leading the way. In 2024 Keurig reportedly controlled more than 80% of the US pod market – but Nespresso and Illy are gaining ground. Illy is growing at double digits in the US through premium positioning – while Nespresso opened a multi-floor “experience cathedral” in Manhattan. Pods have always targeted convenience in the US, but Nespresso, Illy and Lavazza are targeting premium positioning and lifestyle. The pod wars continue.
Starbucks started out selling coffee. Then it sold a “third place”: sofas, playlists and the promise of belonging. Now, it is selling something stranger – screen time. Gen Alpha now discovers brands mainly via creators, games and social platforms. Starbucks is embedding itself inside MrBeast’s Prime Video universe and Roblox instead of relying on cafés. Dutch Bros’ ultra-sweet drinks & merch drops are drive-thru hits with under-30s – pushing scarcity drops and “cute economy” tactics.
The act of placing an order, once a key human connection point, is increasingly mediated by a screen. Self-ordering kiosks, smartphone apps and QR-based menus have proliferated as labour costs balloon and margins tighten. 51% of customers spend more when ordering via kiosks – a clear win for operators. 84% prefer self-ordering, but that doesn’t mean they want screens everywhere. As Starbucks’ recent automation rollback shows, efficiency sells, but in a loneliness epidemic, connection still matters more than ever.
India’s specialty coffee scene has come of age. But the newest symbol of its ambition, beyond its coffees, is fancy artisanal baked goods and cakes. India’s café market is set to double by 2030, pushing coffee shops to seek new profit engines beyond coffee. Pastry-led innovation is booming, from ₹330 croissants to viral “crookies,” reshaping how cafés differentiate and drive margins. Specialty coffee shops/ craft bakehouses like Subko are turning pastries into India’s next big F&B export.
Asia has not traditionally been thought of as the engine of global coffee demand. But that is changing fast. Its coffee demand has grown 14.5% since 2018. China’s café market jumped 58% in 2023 to 50,000+ stores, overtaking the US as the world’s largest branded coffee shop market. Indonesia’s domestic consumption has tripled since pre-pandemic years, and India’s coffee industry is set to double by 2030.
Last week, a laminated store notice at Dunkin’ Donuts allegedly instructed staff to fill iced drinks with more ice and less liquid. On anonymous Facebook groups and Reddit forums, furious customers accused the chain of trying to deceive customers by cutting corners. The news reveals that consumers’ tolerance for shrinkflation is waning. In a market where 79% of consumers are trading down, trends like these can erode consumer trust and loyalty. A recent study by McKinsey found price pressure is global consumers’ no.1 concern.
Europe is often spoken of as a single market. Its coffee culture proves otherwise. 25 countries entered the Global Coffee Awards, exposing Europe’s wild flavour split. The EU drank 2.53 million tonnes of coffee last year, yet behaves like dozens of mini-markets with clashing tastes, rules and rituals. Experimental coffees dominated entries from Greece, France and Slovakia, while Ireland, Switzerland and Norway stuck to classic washed styles.
Once satisfied with selling cola and fries, many quick-service restaurants (QSRs) now view drinks as high-margin opportunities and brand extenders – — from Chick-fil-A’s new Daybright brand to McDonald’s CosMc-inspired beverages. Taco Bell’s Live Más Café has sold 600 million drinks this year, with beverages now included in over 60% of its orders. With Gen Z flocking to drink-forward chains like 7 Brew and Dutch Bros, traditional QSRs are racing to join in.
Shanghai once drew its identity from tea. Today, it points to the future of coffee. Bloomberg recently anointed the metropolis “the world’s most compelling coffee city”, a title that would have seemed fanciful just a decade ago. With 9,115 cafés – more than London, New York or Tokyo – the city has become coffee’s most dynamic testing ground. China’s coffee consumption has grown by 150% in the last 10 years, reshaping global demand. Shanghai’s consumers prize customisation, community and design – a preview of where coffee culture is heading worldwide.
According to President Trump, “tariff is the most beautiful word in the dictionary.” But the repercussions for businesses and consumers worldwide have been drastic. Colombia faces the threat of higher tariffs and Nicaragua faces up to 100% duties, threatening entire export models. A new US–Vietnam deal would exempt coffee from a 20% headline tariff – accelerating the shift toward cheaper Robusta beans. US coffee costs are rising faster than food inflation, prompting lawmakers to block new tariffs on Brazil.
Caffè Nero has reported record first-quarter revenues of £166 million, up 9% year on year, fuelled by a 49% surge in iced-beverage sales. Starbucks says 75% of its global beverage sales now come from iced drinks. The UK had the highest iced coffee sales in Europe in 2024 and has seen a 22% compound annual growth in the past 5 years.
Colombia has reportedly closed its most productive coffee year in over three decades, producing some 14.87 million 60-kg bags, a rise of 17% over the prior cycle. But its 2025–26 harvest is forecast to contract by 5.3% due to heavy rains and the natural coffee cycle. WIth US tariffs on Brazilian coffee reshaping global supply chains, “tariff arbitrage” and alleged origin blending pose long-term challenges to market trust.
In America, coffee culture is increasingly less about cafés and more about cars. Drive-thru coffee chains – Dutch Bros, 7 Brew, Biggby Coffee, Scooter's Coffee, and Black Rock Coffee Bar – are multiplying across the country at a rate that rivals fast-food franchises. A record 59% of US coffee purchases now happen at drive-thrus, up from 55% last year. 7 Brew’s sales surged 163% in 2024, while Dutch Bros’ stock jumped 64%. Nearly 3/4 of all US restaurant traffic is now off-premises, with cars doubling as both café and sanctuary for increasingly solitary consumers.
Starbucks once symbolised modern coffee culture: a “third place” between work and home, where consumers lingered over $4 caramel macchiatos and free Wi-Fi. Today, that model faces pressure. Same-store sales have slowed, and over 70% of consumers say they plan to visit less, citing high prices. Hundreds of stores are closing, senior executives are departing, and rivals like Dutch Bros are expanding as Starbucks’ share price falls. Efficiency measures, higher prices and job cuts coincide with the company’s continued emphasis on nostalgia and its “third place” identity.
Coffee on American supermarket shelves is becoming increasingly less affordable for the average consumer. Ground coffee prices in US supermarkets surged almost 21% year-on-year in August, hitting a record $8.87 a pound, according to the Bureau of Labor Statistics. That marks the steepest rise since the 1990s. Tariffs on Brazil and Vietnam have turned America’s most essential import into a bargaining chip. Consumers are trading down, stockpiling, or even swapping to caffeine tablets.
Every autumn, America undergoes the same ritual. Supermarkets stack cinnamon-scented candles, Instagram grids fill with orange foliage, and coffee chains roll out the pumpkin spice latte (PSL). Starbucks’ Pumpkin Spice Latte, first launched in 2003, is its most popular seasonal drink of all time. It drove a 24% jump in store visits on launch day last year. Even as tariffs push up costs of coffee and spices, Starbucks says 10% of sales now come from “returning favourites” like PSL.
J. M. Smucker raising its prices in the wake of US tariffs raises an alarm. The custodian of Folgers, Dunkin’ and Café Bustelo has long been a bellwether for America’s coffee market. But are tariffs the cause, or the final straw for a market already in decline? Smucker’s US retail coffee profits plunged 22% last quarter, as tariffs on Brazilian coffee increased input costs. Volumes fell 2% as net pricing went up 18%, signalling that households are cutting back. Tariffs could accelerate a broader US decline in coffee demand.