• Coffee shops are a “third place” between home and work, defined by sociologist Ray Oldenburg in 1989, catering to the social needs of local communities.
• Research shows that people are more likely to visit coffee shops for social reasons rather than practical ones, which means customer experience is paramount.
• But roasters are facing a tumultuous year, with record green coffee prices, US tariffs, and escalating operational costs, forcing them to allocate resources where they need them most.
• To succeed and thrive, coffee roasters need to find new ways to balance profitability with community engagement.

Coffee shops are the “third place”: a social space that serves the community and meets their holistic needs. Yet, simultaneously, roasters and coffee shops are businesses, meaning they need to stay profitable – and striking this delicate balance has become increasingly challenging in recent years.

Record green coffee prices, rising inflation rates, stricter access to credit, and increasing operating costs are squeezing roasters’ profit margins more than ever. Operators now need to allocate more of their attention and financial resources towards areas that need them most.

In today’s tough economic landscape, this means it’s all too easy for coffee businesses to lose sight of one of their most important purposes: serving their local communities.

I spoke to Sean Ham and Chase Stafford at Iconik Coffee Roasters to find out why roasters need to prioritise profitability and community engagement.

You may also like our article on whether specialty coffee shops are overthinking the basics.

Why it’s never been harder for coffee roasters to balance their priorities

Third wave and specialty coffee culture were built on the premise of excellent coffee and hospitality. Decades ago, passionate and aspirational entrepreneurs sought to transform the coffee industry through exceptional quality beans and customer service, demonstrating that specialty coffee is more than just a commodity; it’s a premium culinary experience.

Community building was central to these efforts. Third wave cafés created spaces for customers to engage with coffee in new ways, allowing them to develop a connection with products and brands that aligned with their values and identities.

Years on, this drive to elevate coffee’s quality and artisanal excellence still prevails. But the coffee industry has since matured, and seeking out financial stability has never been so important.

The current global economy has made running any business more expensive, but coffee roasters in particular are struggling. Higher operational costs mean everything from labour to rent to packaging to energy is chipping into their margins.

Operating in today’s already saturated and hyper-competitive specialty coffee sector, roasters haven’t been able to catch a break this year from historically high green coffee prices, rising inflation rates, and unprecedented tariffs. 

Most recently, US President Trump has imposed staggering 50% levies on Brazilian imports, including coffee. This decision is likely to create even more logistical hurdles, potentially reshaping global coffee trade and driving up green coffee costs further.

Profitability is at the forefront

Rising interest rates have also made it increasingly difficult for roasters to obtain credit, commonly in the form of short-term loans to cover large green coffee purchases. 

“We’ve had to be creative in our approach to green buying and transport logistics to make the numbers work. There’s only so much you can sell a cup of coffee for, no matter how tasty it is,” says Sean Ham, the owner of Iconik Coffee Roasters, a specialty coffee roaster with three cafés in Santa Fe, New Mexico, US.

Inevitably, roasters are feeling the pressure to shift their priorities towards seeking alternative funding, tightening their spending, and reshaping their green coffee sourcing strategies. The reality of running a roastery in today’s economic landscape is more about survival by remaining agile and adaptable than ever before.

In reprioritising their budgets, roasters and coffee shops alike are finding themselves at a crossroads: do they absorb higher costs and erode already tight margins? Should they increase their prices to maintain quality and sustain long-term partnerships? Or shift to cost-effective coffees to keep retail prices affordable?

Although much of the immediate focus is on the financial aspects of running a roastery or café, at the same time, operators can’t lose sight of their foundations: serving the communities that helped build their businesses.

Customers must still come first

Profitability, alongside creating an engaging community experience, is essential to running a sustainable roastery or café. Now more than ever, as retail prices rise, consumers are seeking maximum value from the coffee shops they buy from.

Wanting more than simply “coffee”, consumers are increasingly demanding an experience every time they visit a café.

Coffee shop staff can make or break this. Serving as brand ambassadors of the business, baristas must elevate the café atmosphere by sharing their coffee knowledge, building connections with customers, and cultivating a positive space for both staff and the community.

Therefore, hiring and retaining exceptional staff members is essential for customer satisfaction. Coffee businesses need skilled and passionate professionals who demonstrate initiative, creativity, and forward-thinking to keep the business agile, especially when challenges arise. 

Upholding a culture of respect and trust in the workplace helps employees perform better, too, and customers will notice this.

“In our small town of Santa Fe, our baristas are recognised and celebrated,” says Chase Stafford, the director of coffee at Iconik Coffee Roasters. “The love we receive in and outside of our cafés is a sign that we are doing something right; it shows that our dedication, hard work, and efforts to cultivate an amazing experience for the community are worth it.”

Building and maintaining consumer trust is a worthwhile investment to cultivate long-term customer loyalty and an emotional connection with a brand. Key to this trust is proving to customers that a coffee business operates with their best interests in mind. Owners and operators can demonstrate this through attention to detail to both products and customer service, as well as going above and beyond to exceed expectations.

Café staff are, again, indispensable liaisons for building overall trust in a business. Baristas can communicate the realities of increased operating costs, leading to more positive perceptions of price fairness.

Meeting the needs of diverse customers

Although it may not always seem straightforward, roastery and café operators can prioritise profitability and customer satisfaction simultaneously. 

Iconik Coffee Roasters’ three café locations in Santa Fe, for example, offer a distinct hospitality experience that meets different consumer needs.

“Each café is a variation on a theme of ICONIK,” Sean explains.“Each location has a different food menu, and a separate but familiar aesthetic, giving locals an opportunity to change scenery and tourists a reason to go back.”

Prioritising the balance of profitability and customer experience can also be achieved by diversifying coffee offerings. As prices rise, a tiered approach can cater to a broader spectrum of customer preferences. 

Developing a range of more accessible coffees, without compromising the positioning of premium offerings, can introduce customers to new origins, varieties, processing methods, and blends.

“We clearly distinguish all of our coffees into quality tiers,” says Chase. “White bags are for ‘familiar’ coffees based on roast profile or ‘traditional’ flavour profiles. Red bags are the ‘gateway’ coffees: wonderful coffees that hit a lower price point for consumers, acting as a segue to our Turquoise bags: our Exceptional Series coffees – ultra-light, well-developed, clean coffees that have unique flavour profiles.”

Consistently meeting or exceeding customer expectations can encourage them to explore more of a brand’s offerings, which can lead to greater profitability in the long term. 

Community engagement through coffee shop events

To successfully navigate the upcoming years of financial uncertainty, roasters and coffee shops must nail down an effective management strategy – which is largely predictive of a business’ long-term success. 

First and foremost, building a business upon a community-focused foundation not only gives back to the local community but can organically promote a brand and grow its customer base. 

Fundamentally, cafés should focus on creating a positive impact on their community. This starts with being inclusive of all customers and hiring local staff who are representative of their diverse communities. Furthermore, companies that focus on their employees’ performance, well-being, and job satisfaction are much more likely to outperform their peers and see higher revenue growth. 

Although capable managers lead successful café-roasteries, they rely on an effective management strategy. Businesses with this solid foundation can take community engagement a step further by hosting a range of events that bring community members together in their spaces.

Iconik Coffee Roasters, for instance, hosts events that support community engagement. Everything from cupping sessions, to barista competitions, to collaboration with local businesses, to music and art shows opens the doors for diverse groups of people to visit their cafés. 

“We want the community to feel like ICONIK is their place,” Sean says. “Events introduce new people to our brand and our mission; to connect customers and staff with coffee, community and each other.”

Research shows that people are more likely to visit coffee shops for social reasons rather than practical ones. Fostering a superb, all-embracing customer experience at events, as well as on a daily basis, can cement a café as a “third place” for an increasing number of people.

There are also practical implications for organising in-house events. Instead of paying the higher costs associated with larger industry festivals and trade shows, hosting smaller events can be a more accessible way to connect with potential new customers. 

Diversifying revenue streams

Beyond investing in customer service and hosting community activations, offering B2B services can extend reach even further. Coffee shops and roasters can connect with other local businesses, both in and out of the coffee industry, to attract new wholesale clients and support local economies.

“ICONIK offers comprehensive café design and review consulting solutions in addition to our coffee and equipment offerings. Businesses need more than coffee alone, and we provide solutions to manage overhead costs and keep money in their pockets,” Chase says, adding that diversifying into B2B services helped Iconik Coffee Roasters strengthen its revenue streams. The company also offers coffee classes for home and professional baristas.

“We supply café equipment and supplies from partners like Modbar, Slayer, and Eversys, with discounts for our business accounts,” Chase adds.

It’s a tricky time to operate a coffee shop or roastery. While financial challenges may be at the forefront of priorities, businesses also need to make sure they keep pace with the needs of their local communities.

“We love offering exceptional and unique specialty coffees, realising those sales are just the icing on the cake,” Sean concludes. “ICONIK is popular with the community precisely because of the experience we offer. Prioritising profitability and customer satisfaction simultaneously is possible, and we believe it’s the winning formula.”

Enjoyed this? Then read our article on how the third place concept relates to coffee shops.

Photo credits: Iconik Coffee Roasters, Mike Flores

Perfect Daily Grind

Please note: Iconik Coffee Roasters is a sponsor of Perfect Daily Grind.

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