High coffee prices, sustained over the last two years and reaching a new record in February 2025, are a lasting reality for the industry. Roasters and cafés face a tough but inevitable decision: raise retail prices or risk a hit to margins.
Some who anticipated the spike have already increased their prices, positioning themselves for a difficult year. However, as conversations continue about how high coffee futures could go in 2025, it’s clear that business operators need to remain agile and adaptable to navigate the challenges ahead.
According to a recent UN FAO report, up to 80% of coffee price rises will trickle down to EU consumers over 11 months, while 80% of them will feed through to US consumers over the next eight months. The report also found that the residual impacts of price rises will last for four years, indicating that further hikes could be on the horizon.
I spoke to Robi Lambie, founder of Cairngorm Coffee, Dafne Spadavecchia, co-founder of Faro – Caffè Specialty, and Paul Ashby, director of Bogota Coffee Company, to find out how much coffee shop prices could go up.
You may also like our article on why roasters need to compete on more than just price.
The impact of higher green coffee prices is global
The C price – the global benchmark for coffee prices – has been consistently high for the last two years, leading to a fundamental shift in industry dynamics. Roasters are pushed to source more cost-effectively or seek alternative funding. At the same time, producers are dealing with a growing number of interconnected challenges, such as the rising costs of labour and fertilisers, that underscore how “higher” market prices don’t necessarily mean a more equitable supply chain.
“Global politics, which has a direct influence on the C market, is currently so fractured and unpredictable,” says Robi Lambie, the founder of Cairngorm Coffee in Edinburgh, Scotland.
Although market volatility is an inevitable part of the trade of coffee, the ongoing Russia-Ukraine and Israel-Gaza conflicts have driven up global food and energy prices to record highs and caused unprecedented logistical backlogs and delays.
US President Trump’s decision to impose tariffs on several countries, including Mexico, has slashed economic growth rates – and effectively started a global trade war that shows no signs of slowing down.
“The situation is also exacerbated by the climate crisis and commodity traders pushing up prices. These are factors out of our hands,” says Paul Ashby, the director at Bogota Coffee Company in Milton Keynes, UK. “People think the C price could peak around US $5/lb, and that even if it does hit this number by the end of the year, it will eventually settle around U$3/lb.”
Retail price increases have become inevitable for roasters & cafés
Roasters, which tend to thrive on lower coffee futures, everywhere then face the difficult decision of balancing price hikes with retaining customers. Operators have to quickly adapt to find new ways of managing cash flow and tight profit margins while maintaining and improving the quality and diversity of their offerings.
Many have increased their menu prices over the last year to cover the higher costs of green coffee, energy, food, and labour. The cost of living crisis has exposed consumers to rising prices for essential goods and services that outpace wage growth, straining their pockets. In Greece, food prices have increased by almost 40% in the last 15 years, while the Japanese food and beverage industry is grappling with record inflation rates that are pushing business owners to focus more on export markets.
Inevitably, consumers around the world will adapt their purchasing habits as they feel the impact of higher coffee shop prices. At-home consumption could increase, while café visits are likely to become a “treat” rather than a daily occurrence.
“We expect prices to rise, but in some ways, this may be the shift that has been needed for some time: to break through the artificial ceiling that has kept coffee undervalued as a luxury product,” Robi says.
For coffee drinkers in mature specialty coffee markets like Australia, Scandinavia, Japan, and the US, there may be less resistance to retail price increases, as people are accustomed to paying more for quality coffee. The situation for café operators in more “traditional” markets, however, may not be as straightforward.
“Italy, as well as some other Mediterranean countries, are facing issues related to the rising C price which are slightly different from, for example, the UK, Germany, France or Scandinavia,” says Dafne Spadavecchia, a co-founder of Faro – Caffè Specialty, the first specialty coffee shop in Rome, Italy. “Ten years ago, the Italian market knew very little about different ways to extract and drink coffee.”
How much should coffee shops raise their prices?
It’s never an easy decision to increase menu prices, but it has quickly become unavoidable. The mounting costs of green coffee, food, energy, labour, and packaging mean coffee shop operators and owners need to adjust accordingly to keep profit margins healthy. Otherwise, they risk huge hits to their business and losing out to competitors.
“We won’t feel the full impact of an industry-wide price increase for another couple of months, but when we do, the key for us is to be open and transparent, explaining that these increases aren’t solely about profiteering but about sustaining an industry that supports farmers, importers, roasters, and baristas,” Robi says.
“The key is to ensure that as costs rise, so does the overall value of what you offer. The real opportunity here is to encourage a customer base that understands the true cost of coffee and appreciates it for more than just affordability,” he adds. “The long-term impact will depend on whether businesses embrace this as a moment to reinforce the real value of specialty coffee rather than just absorb rising costs in silence.”
Maintaining quality and investing in customer service and hospitality then becomes paramount to warrant price hikes, ensuring increasingly price-conscious consumers feel valued.
“I think the most important thing that coffee shops can do, more important now than ever before, is consistency,” Paul says. “If customers are paying a higher price and they’re not getting the same drink every day, or the quality’s not there, then it’ll be a long time before they come back.”
However, for many coffee shop owners, the question of how much they should raise prices remains. In a recent newsletter, specialty coffee importer Royal Coffee suggested a US 25 to 50 cent increase per cup to cover higher green coffee costs, but these are just one piece of the puzzle. Business costs are rising across the board, and operators need to factor all of them in when managing menu prices.
“Nearly every aspect of running a coffee shop is becoming more expensive; milk prices continue to rise, labour costs are increasing, and energy bills are at an all-time high. These realities shape pricing decisions just as much as the cost of green coffee,” Robi says.
Finding ways to manage costs also isn’t strictly related to price increases.
“We have shifted our retail coffee bags from 250g to 200g. While the cost per gram remains the same, this keeps the total purchase price more manageable for customers,” Robi adds. “We’re also considering a similar approach in the coffee shop, potentially reducing our espresso dose slightly from 18g to 15g.”
An opportunity to engage more deeply with consumers
Higher retail prices are driving shifts in consumer behaviour that coffee businesses will need to adapt to. The expected rise in at-home consumption will likely push roasters to refocus on e-commerce and subscription channels, much like during the pandemic, bolstering their resilience as the industry undergoes fundamental changes.
These shifts, however, are set against the backdrop of mainstream media reports about rising prices, with claims of US $10 lattes undoubtedly causing concern and uncertainty among coffee drinkers.
“When media outlets sensationalise price increases, it can create unnecessary panic,” Robi tells me. “The reality is far more nuanced. While costs are rising, much of that increase is long overdue and reflects a fairer value for coffee producers.”
This presents roasters, café operators, and baristas with opportunities to engage more deeply with consumers about the perceived value of coffee.
“Television and radio talk shows in Italy keep talking about high coffee prices, especially with reference to the conventional market,” Dafne says. “The biggest challenge is to substitute and replace the word ‘high’ with ‘fair’. Coffee has been underpriced for years, so you can’t blame consumers for their lack of knowledge because it’s not their job to be informed.
“Although we belong to a niche market, we have to bring quality coffee to everyone and keep informing and educating people.”
But coffee businesses need to be mindful of consumer needs
There’s a notion in specialty coffee that consumers want to be more educated about roasting, brewing, and the wider supply chain, demanding better transparency and traceability. While this is certainly true, higher prices are likely to disrupt this trend as consumers’ priorities change.
“Education has always been a tricky word in specialty coffee shops, but explaining the value of what we do is essential, and it has to be done with a soft approach – one rooted in context rather than entitlement,” Robi says. “The key is making any shared information engaging and relevant. Rather than over-explaining, I believe we should focus on making sure our quality, service, and overall experience always justify the cost.
“So while education has its place, our priority should be ensuring that when people walk into a coffee shop and pay a little more, they feel like they’re getting something that’s worth every penny,” he adds. “Coffee shops have to do more than just pass on the cost; we have to focus on what makes us worth it. Rising prices should push coffee shops to double down on the value they provide beyond just the cup. That means investing in education, service, and storytelling – helping people understand what they’re paying for and why it’s worth it. In my opinion, this is an opportunity for coffee shops to raise the standard, not just the price.”
For some consumers, the knowledge gap is much wider, meaning coffee shops and roasters need to share information in more creative and inventive ways.
“We draw a parallelism with wine; learning about specialty coffee is like finding out that different types of wine exist,” Dafne says. “They’re both so similar in terms of altitude, fruit, and flavour.
“The gap between specialty and commodity has never been so narrow. The price of supermarket coffee will increase massively, and less so for specialty coffee, so coffee businesses have an opportunity to get their message across,” she adds. “Conventional coffee has been underpriced for decades, but I think we’re at a point where rising prices will encourage more people to drink with more awareness.”
It’s a turbulent time for the coffee industry, presenting new challenges and hurdles to navigate. But Dafne, Robi, and Paul agree that there is a silver lining: a chance to communicate the value of coffee.
“As coffee professionals, we should be amplifying these insights, helping both businesses and consumers grasp the realities of specialty coffee pricing. The larger trends – climate change, increasing production costs, and logistical challenges – aren’t going away, so while fluctuations will always happen, the days of artificially low coffee prices are likely behind us,” Robi says. “The real question isn’t whether prices will drop, but whether we, as an industry, can adjust to this new reality.”
Paul concludes with: “It’s an unpredictable situation, but the coffee business has been around for centuries, and we always adapt.”
Enjoyed this? Then read our article on how high coffee prices could go.
Photo credits: Cairngorm Coffee
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