We have all noticed, the price of coffee is increasing at a speed and level never recorded before.
What’s happening to the beloved cup?
From the global crisis of raw materials, to the weight of extreme weather events, along with the criticism of the Ministry of Made in Italy to the European Union; the price increases are now skyrocketing.
Is this the right time to talk about the value of coffee?
Read the article to learn more!
The causes
Let’s start the article with the causes of these unprecedented increases, which all together contribute daily to worsen the already serious situation, both for consumers and for those who work along the supply chain.
Extreme weather events are becoming more frequent
Crops in Brazil, which alone produces ⅔ of the coffee consumed globally, Vietnam, Colombia, Costa Rica and Honduras have suffered damage due to alternating periods of prolonged drought, alternating with abnormally heavy rains, with a consequent collapse in production.
Thus, the prices of Arabica and Robusta on international markets have reached their highest levels since the 1970s.
This unstable climate situation has also cast further concern on the yield of the next harvests, increasing nervousness in an already rather restless market.
The bags
The price of raw coffee is not set by the grower independently, or by the transporter, but not even by the importer. The price of raw coffee is set by the stock exchange, more precisely by the New York stock exchange for Arabica coffee, and by the London stock exchange for Robusta coffee, the two most traded species in the world.
The above events have pushed stock market prices to record levels, also impacting end consumers.
The wars
The various wars in progress have:
- Modified logistics, diverting the historical transit routes of container ships, consequently lengthening transport times and costs;
- Increased fuel costs, which always impact transport;
- Increased gas costs, making production more expensive for companies
All this is reflected in the final price that coffee has today.
Inflation
Inflation, which alone has already caused a great deal of damage to the pockets of end consumers, if added to the previous items, everything becomes even more burdensome.
The European Union
The new EU regulation on deforestation, the much-cited EUDR, has imposed constraints that are sometimes too complicated for developing countries, which cannot always guarantee the environmental certifications required by the legislation, thus reducing the quantity of raw coffee imported into Europe.
This new regulation is actually useful and I would even say essential nowadays, providing new limits and guidelines for the sustainable use of lands suitable for growing coffee and other products. It must therefore be considered a great incentive, a new starting point for a more ethical and environmentally friendly supply chain, also useful as a tool for communicating a greater value for the coffee product.
This does not take away the fact that especially the poorest producing countries face serious difficulties in adapting to the regulations, with governments that do not support small and medium farmers, where corruption reigns and where bureaucracy is sometimes completely absent.
The entry of new global players
The entry of China, India and the Middle East into the coffee market has upset the global balance that has been consolidated for decades.
Countries historically devoted to tea have begun to consume coffee on a massive scale, focusing in particular on high quality.
Economics teaches us that if less coffee is produced, but global demand increases, the cost of the raw material also increases, becoming increasingly precious and sought-after.
Financial speculations
As always, when there are glimmers of hope for huge profits, there are also those who take advantage of it, further worsening the overall situation.
At this rate, the hypothesis of a €2.00 cup, expected between 2026 and 2027, in Italian bars is no longer a mirage, but a possibility that is becoming more and more concrete day after day.
Beyond the price: the value of coffee
Now, the question that should emerge is not only the economic one. We should also reflect on the value of this raw material.
In fact, it is precisely the perception of value that determines the price of a good. If coffee continues to be considered only as a commodity, it will never be given the respect it deserves.
And the discussion cannot be reduced to the high quality of coffee alone..
An espresso for €2.00?
If the value of the product is well managed, from an ethical and consumer education perspective, the cup can even reach €5.00 or more!
Let me give you an example: you have never heard of the generic price of a glass of wine, as if in any bar, restaurant or pub it should always and only cost €4.00, without considering where, who and how it was grown, according to which agricultural practices, certifications and all the information we know about wine. It is time that coffee was considered and valued like any other product in the agri-food chain, differentiated based on its intrinsic and extrinsic value.
Coffee is not just a drink (and it is not just espresso or moka), but it represents a very long supply chain made up of people.
Consider how many hands the coffee beans pass through before reaching you: grower – washing station – milds center – export broker – transporter – import broker – green coffee distributor – roaster – distributor – barista – final consumer.
Every cup of coffee contains the work of people who often work in difficult conditions, in countries affected by political instability and climate change, other times with starvation wages and based on the exploitation of resources. If we think that all these people, companies, realities and therefore also families, support themselves with a cup at a time of € 1.20, then perhaps it begins to seem too little.
It is therefore urgent to invite consumers to consider coffee not only for its price, but for the value it represents.
In Italy, this could mean a change in consumer habits, with greater attention to quality and more descriptive labels, corporate ethics and respect for the supply chain and its direct collaborators.
We need to rethink coffee as a comprehensive experience, which encompasses stories of territories and people, ensuring that every sip of coffee is not only a sensory pleasure, but also an act of awareness and responsibility.
Future repercussions
From this analysis we understood that it is not possible for a manager to absorb further costs without adjusting the prices of coffee to the final consumer.
The situation presents a significant challenge for bar and roaster managers. It is crucial to find a balance between profit and customer satisfaction to ensure the long-term survival of the premises and other businesses in the sector. Considering that at present there is no forecast for a halt to the increases in coffee stocks, but rather a continuous increase at least throughout 2025, this can no longer be ignored.
At the supply chain level, rising prices could incentivize producers to invest in more resilient and sustainable farming practices, such as climate-smart technologies or more resilient coffee varieties. However, the risk of increased concentration of supplies among a few global players could reduce opportunities for small-scale farmers to compete.
The commodity rally cannot be interpreted as an isolated or temporary phenomenon, but as the result of a convergence of structural, geopolitical and market factors. The ability to address these challenges will define the future of the global economy.
Marketing, E-commerce e Social Media Manager
Coffee Lover
