• Many pioneering third wave roasters built their brands on paying higher, fairer prices for single origin, traceable micro lot coffees.
• But in today’s challenging economic climate, green coffee costs are squeezing margins more than ever.
• In an effort to protect their bottom lines, larger, established roasters have shifted to more cost-effective coffees, aiming to reach a broader audience.
• The implications are felt across the supply chain, influencing smaller roasters’ behaviour and reshaping trade dynamics and consumer trust.

Single origin micro lots once underpinned third wave practices, from expressing the unique characteristics of each coffee to ensuring traceability along the supply chain.

But as larger roasters, many of which built their branding around these sourcing strategies, grapple with sustained high green coffee costs, consistently offering these coffees has become less viable.

Instead, the demand for consistent, familiar blends and more cost-effective options is driving the market, ultimately changing the prices paid for coffee and reshaping trade dynamics.

To learn more, I spoke to Shawn Hamilton of Klatch Coffee. 

You may also like our article on whether consumers will favour smaller, local roasters as prices rise.

Specialty coffee was built on single origins & micro lots

“Single origin” has been a key defining factor of specialty coffee since its inception. Pioneering roasters popularised the term in the early 2000s, leveraging it to emphasise their commitment to sourcing traceable coffees that are a “true” expression of terroir.

This served as a unique point of differentiation in a highly competitive coffee market, and continues to do so today. By communicating the superior quality of these coffees, as well as the mutually beneficial relationships with the producers who grow them, roasters can justifiably charge higher prices.

The demand for these coffees only continued to grow. In 2020, nearly half of global coffee company launches mentioned some value associated with sustainability, double from the number in 2012.

However, over the years, the term “single origin” has become less straightforward; it can be used to describe coffee from a single country, region, estate, or cooperative.

As specialty coffee consumers take a greater interest in traceability, the ambiguity around “single origin” coffee has become increasingly evident. In response, specialty coffee roasters of all sizes have refined their focus; “micro lots” have become a defining feature of the industry, with less confusion about where they come from.

Although multiple definitions exist, many coffee professionals use the term for small, exclusive, and traceable lots of coffee that are grown and processed separately to preserve their “pure” flavours.

Effectively, micro lots offered roasters an opportunity to “double down” on single origin coffee and the values they represent. The higher costs of production – a result of the greater care and attention to detail required during cultivation, harvesting, processing, and milling – mean these coffees can command even higher prices.

To secure loyal customers and attract new ones, many trailblazing roasters made micro lots a staple of their offerings, positioning themselves as quality pioneers in an increasingly competitive market.

But high coffee prices have become a new reality

Historically, specialty coffee roasters thrive when coffee prices are low, allowing them to purchase high-quality beans while maintaining healthy profit margins. But the recent surge in the C price is forcing both roasters and producers to adapt in new ways, reshaping strategies and relationships across the supply chain.

Green arabica prices surpassed US$4.40/lb in February 2025, and have largely remained around the US$4/lb-mark ever since. The reasons for the surge, representing a more than 70% increase from three years prior, are complex: supply shortages in major producers such as Brazil and Vietnam, the impact of climate change, and unprecedented US tariffs.

Many in the industry expressed their shock at seeing the highest coffee prices since the 1970s – an occurrence some never expected to witness in their careers. While it’s a welcome shift for an industry that advocates for higher, fairer prices for producers, the reality is more complicated. 

Unpredictable weather, rising fertiliser costs, and labour shortages all add pressure to farmers’ operations. Additionally, buyers are more cagey, so more options don’t necessarily equate to a better position for producers.

Although coffee price volatility is nothing new, the current situation is different. Instead of the dramatic yet predictable peaks and troughs, prices have remained consistently high, creating a new set of challenges for both roasters and producers.

Roasters, in particular, are largely unaccustomed to such financial pressures. When the C price exceeds US $2/lb, many often express concern, as it directly impacts their ability to maintain margins without raising consumer prices.

In an effort to protect bottom lines, many roasters, particularly larger operations, are turning to cheaper blends or diversifying their sourcing to include lower-cost origins.

Cheaper lots and origins have become more viable

As the industry comes to terms with the likelihood of sustained high coffee prices for the foreseeable future, stakeholders across the supply chain are taking steps to adapt.

For successful roasters, it means adjusting to a “new normal”, rather than waiting for prices to fall. A key part of this is rethinking green coffee sourcing and retail pricing strategies, and striking a delicate balance between the two.

Many specialty coffee roasters have inevitably had to raise their retail prices, passing on additional costs to consumers rather than absorbing them completely. Understandably, however, some customers and wholesale buyers are expressing confusion or pushing back on higher prices. Many believed they were already paying more to support coffee producers and shield the supply chain from volatility.

According to a recent Reuters report, major retailers in Europe initially resisted price increases, opting to stock out rather than absorb the costs, after green coffee prices more than doubled in a year. This highlights widespread uncertainty over who should bear the additional financial burden in the coffee supply chain.

In a bid to avoid price hikes and the ensuing tension they can cause, roasters – especially larger operations that depend on both B2B and B2C clients – have significantly shifted their sourcing strategies. Cost-effective coffees have become a much bigger priority, signalling a temporary pivot away from high-end origins and micro lots.

“Bigger roasters are buying cheaper coffee in general,” says Shawn, the Vice President of Operations at Klatch Coffee, a family-owned specialty coffee roaster founded in 1993. “They need larger quantities of consistent-tasting coffees, and when you require these kinds of volumes, you somewhat have to settle on quality to achieve consistency.”

Sourcing from more affordable, yet still quality-driven, origins like Brazil has proven effective, allowing roasters to protect quality, flavour consistency, and pricing stability. Blending has also become a key strategy for roasters, enabling roasters to maintain quality while managing costs.

How does this impact the wider coffee supply chain?

As larger roasters shift their buying behaviour to adapt to sustained high coffee prices, other supply chain actors inevitably feel the effects.

For consumers and wholesale clients, there are obvious benefits. “Roasters can manage their margins without hiking prices, so it translates to smaller price increases to the consumer,” Shawn says. 

However, the trade-off between price and quality can be difficult to balance. 

“The downside is that the larger companies, by default, are selling a larger share to the consumer,” Shawn explains. “If their coffee is now diminishing in quality, that can leave a bad taste in people’s mouths – no pun intended.”

Without transparent and honest communication explaining the steps taken to minimise price increases, such as blend reformulation or a temporary switch to more affordable origins, roasters risk damaging consumer trust and loyalty.

“This could eventually lead to people switching from coffee to other beverages and decreasing consumption across the entire industry, not just the brands that ‘cheapened’ their products,” Shawn adds.

The launch of more affordable sister brands, such as Madcap Coffee’s ‘Dito’, is an example of how roasters can satisfy loyal customers while also extending their reach. Marketed as “a creative way to reach a broader audience”, Dito targets younger and price-sensitive consumers with aesthetic packaging and more accessible price points, simultaneously preserving the premium position of Madcap’s other coffee products.

Producers, meanwhile, also feel the impact of changing roaster behaviour. While those who offer more cost-effective coffees could benefit, others in more premium origin countries could struggle to maintain their market share. This risks upending long-term partnerships with trusted suppliers, damaging resilient supply chains that have been developed over years.

But with coffee prices not expected to retreat until late 2025 – and the ripple effects likely to be felt for at least four years, according to recent UN forecasts – short-term thinking and opportunism can’t weather the storm.

While roasters may need to add more affordable coffees to their offerings temporarily, the most resilient businesses will be those that prioritise mutually beneficial relationships, transparency, and shared risk management. 

When both producers and roasters understand each other’s challenges and constraints, they can develop resilient solutions that preserve business viability while maintaining quality and sustainability commitments. These trusted partnerships create stability in an otherwise volatile market, enabling long-term planning despite short-term fluctuations.

Larger roasters are adjusting their sourcing strategies to cope with sustained high coffee prices, which inevitably influences the decisions of their industry peers, big and small.

Although more affordable lots and offerings are an effective way to navigate the current economic landscape, roasters who invest in strong relationships, efficient practices, and value-added strategies will be best positioned to thrive in the long term.

Enjoyed this? Then read our article on why roasters are delaying more payments, not just for green coffee.

Perfect Daily Grind

Want to read more articles like this? Sign up for our newsletter!