The global coffee industry is under increasing financial strain. As economic instability persists into 2025, roasters are navigating rising costs across every part of their operations – from green coffee to packaging, equipment, labour, and logistics. These cumulative pressures are not only squeezing margins but also leading many roasters to delay supplier payments beyond coffee purchases.

Postponing payment for large quantities of green coffee has long been part of doing business in the coffee industry. But today, the scope of deferred payments is expanding – signalling deeper liquidity issues and a growing reliance on trade credit as a cash flow strategy. 

While some roasters are delaying out of necessity, others may be using payment extensions as a means of short-term financing.

To learn more about how roasters are navigating financial strain, I spoke to Fran Lee at Café Imports Australia.

You may also like our article on whether sustainability has become less of a priority for roasters amid high coffee prices.

Why the costs of operating a coffee business keep climbing

Following a tumultuous upturn in late 2024, arabica coffee prices have continued their upward trajectory into 2025. According to the International Coffee Organisation (ICO), the ICO Composite Indicator Price (I-CIP) averaged US$3.45/lb in May 2025, reflecting a significant increase from previous years. 

This surge is the result of factors such as climate-related supply disruptions in major producing countries like Brazil and Colombia, ongoing logistical challenges, and fluctuating currency markets. But for many roasters, the financial challenge goes far beyond green coffee. 

“In my experience, many roasters are still feeling the aftereffects of the global pandemic,” says Fran Lee, the sales representative at specialty green coffee trader Café Imports Australia. “While things may look more stable on the surface, the financial impact lingers, especially for café owners and smaller roasting operations.”

In early 2020, up to 95% of out-of-home coffee businesses were forced to close – severely affecting operations and forcing them to adapt to the surge in at-home consumption quickly.

Although many roasters successfully navigated the pandemic by offering subscriptions, educational classes, and brewing equipment, the long-term economic repercussions of the pandemic have had major consequences on almost every global industry. Covid-19 triggered the largest global economic crisis in more than a century, according to the World Bank, and massively disrupted supply chains, driving inflation rates to record levels.

“On top of this, rising costs across the board, whether it’s green coffee, milk, rent, packaging, or labour, are tightening margins more than ever,” Fran adds.

Flexible packaging costs alone have risen more than 30% since mid-2022, energy expenses are predicted to increase by a further 7% throughout 2025, and labour costs continue to climb – adding more pressure onto roasters.

Shipping costs have also increased due to fuel price volatility, while global staffing shortages have raised the cost of hiring and retaining skilled staff. The result is that even profitable roasters are seeing tighter margins and are facing increasingly difficult choices when it comes to allocating cash.

Trade credit as a short-term fix

To manage an ever-widening range of financial constraints, more roasters are relying on trade credit – a business-to-business (B2B) agreement in which a customer can purchase goods without paying cash up front. They pay the supplier at a later scheduled date, usually 30, 60, 90, or sometimes 120 days later.

In the coffee industry, where roasters often purchase large quantities of green coffee at a time, delaying payments isn’t uncommon. But in the case of many roasters, delayed payments are no longer limited to green coffee but now extend to packaging, equipment, and other services. 

“Many roasters are operating on increasingly thin margins and are having to make tough decisions about how to prioritise their cash flow,” says Fran.

Equipment is a significant expense in the coffee industry. Professional espresso machines can easily cost upwards of US$20,000, while roasting machines can range from US$20,000 to US$150,000, depending on their size.

Following on from supply chain disruptions during the pandemic, shortages of raw materials like steel, aluminium, and plastics, as well as components like motors and chips, have made coffee equipment more expensive. Political volatility has also raised costs; the US government threatened China – the world’s manufacturing superpower – with steep 145% tariffs in early April 2025.

After trade negotiations, US-China import levies have since dropped to 30%. Although this represents an 80% decrease, the costs of equipment and parts manufactured in China, which supplies a large number of coffee equipment brands, have still increased as a result.

Impact across the supply chain

For roasters who need to upgrade their equipment, covering these large expenses has become less viable. Some may simply wait in hopes of tariff reductions or price drops, while others may request to delay payments, especially in cases where they urgently need new equipment.

This can provide short-term breathing room, but also pushes risk upstream to suppliers – and can be a result of delayed payment further downstream.

“One of the biggest issues seems to be cash flow. Many roasters are caught in a chain reaction, often waiting on delayed payments from their own wholesale partners before they can pay suppliers like us,” Fran says. “It’s a challenging cycle, often not due to bad intentions, but more a reflection of the broader financial strain across the supply chain.”

Extended trade credit is putting pressure on smaller suppliers like packaging and maintenance providers – especially as many of them rely on timely payments to manage their own costs and stay operational. 

“When payments drag out, it creates cash flow gaps that can slow down their work or limit how many clients these businesses can support,” Fran explains. “Having clear payment terms, open communication, and even partial upfront payments can really help keep things running smoothly on both sides.”

Building trust amid longer-term uncertainty

All signs indicate that price volatility won’t slow down anytime soon in the coffee industry.

Following the Trump administration’s 50% tariffs on Brazil – the world’s biggest coffee producer – the C price has continued to climb, reaching over US$3.47/lb in mid-August 2025.

Despite continuous efforts to exempt coffee from import levies and hints that an exemption may be on the cards, there has yet to be a final confirmation. 

A standard container of coffee, containing about 45,000 pounds of green coffee, now costs importers an additional US$15,000 to $25,000 immediately upon arrival. This sudden financial burden forces importers to reallocate funds from other parts of their operations or seek additional credit, impacting cash flow and leading to higher prices for consumers.

While Australia has been less directly affected by tariffs, Fran says the knock-on effects of global volatility are still felt. 

“Recent tariffs and global trade tensions haven’t impacted us as directly as they have in regions closer to and including the US,” she explains. “However, the added pressure on the already volatile C market has made roasters more cautious, prompting careful consideration of equipment upgrades and supplier relationships with every purchase.”

Some roasters are pausing investment in new machinery or packaging designs, waiting for costs to stabilise. Others are prioritising payments only to long-term partners or mission-critical suppliers. In some cases, suppliers are responding with more flexible terms to help maintain those relationships and keep operations running smoothly.

“Transparent relationships allow us to help the roasters, sometimes by offering flexible credit terms, some breathing room on one-off payments, or even working together on storage allowances and carry charges,” Fran tells me.

Decisions made in good faith

As margins remain thin and the cost of doing business continues to rise, most roasters are trying to navigate these pressures with honesty, integrity, and sincerity.

“The coffee industry is built on trust and strong relationships, and I genuinely believe most roasters want to do right by their partners,” Fran says. “Financially, they might be in a tough spot, but I believe a lot of passionate business owners and operators will adjust and work through this with stronger systems and sustainable sales practices put in place.”

Still, proactive measures are essential – particularly as more roasters move into higher-cost green coffee contracts. These can include optimising internal systems, updating pricing models, or maintaining strong, transparent communication with suppliers and partners.

“When it comes to green coffee, many roasters are still working through existing contracts. But with the C market remaining consistently high, they’ll soon be transitioning into much higher pricing,” she says. “These steps are key to building a sustainable and resilient business in today’s market.

“What works best for us is strong, open communication. When there’s a solid history and transparency around your needs or challenges, we’re better able to support,” she adds. “For example, let your supplier  know a particular payment will be delayed so they can expect it at a later date.”

The recent, although somewhat unsurprising, increase in delayed payments reflects a volatile financial landscape for coffee, but not a fundamental shift in how roasters operate. 

It’s clear that delayed payments are a direct response to current economic pressures rather than a permanent shift in behaviour. Still, the impact can be felt across the supply chain and is likely to have long-term repercussions.

Looking ahead, building trust, clear communication, and flexibility will be vital to maintaining positive working relationships.

Enjoyed this? Then read our article on why specialty coffee roasters need to find new ways to diversify.

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Specialty coffee originally built its pricing narrative around ethics. But persistently high and volatile green coffee prices have changed this.

Since the industry’s inception, many roasters positioned themselves as transparent, responsible buyers. Their marketing strategies were centred around paying fairer prices for coffee that was traceable, sustainable, and higher in quality.

Arabica futures have more than doubled over the last two years, however. Roasters now need to communicate the reasons behind their rising costs in different ways.

Łukasz Jura at Coffee Machines Sale, Julia Ahn at Stronghold, and several people at Trabocca share their insight.

You may also like our article on whether roasters should sacrifice margins or increase prices.

Specialty coffee’s values-driven pricing model has changed

Over the past two decades, direct trade coffee became shorthand for fairness and integrity. Higher prices, in this context, were aspirational rather than burdensome.

Younger demographics, in particular, embraced this idea. According to research, Gen Z consumers are more likely to prioritise sustainability over brand name when choosing where to buy their coffee. 

This messaging brought about brand loyalty. Past price increases were often framed as a values-driven decision – paying more to producers, investing in higher quality, or supporting sustainable practices. 

But it also created expectations that had to be fulfilled. Consumers wanted to experience the outcomes of these premium prices, whether through improved transparency and traceability, storytelling, or exceptional coffees.

Today, price increases are driven by necessity, and roasters now have to raise prices for reasons that feel less altruistic or positive.

“Roasters have always championed their values, and now is not the time to stop,” says Greg Graves, Business Unit Operations Manager at green specialty coffee importer Trabocca. 

“The narrative is shifting; it’s no longer about paying more because it’s right, but also because it’s necessary. But that doesn’t mean customers won’t understand, especially if you bring them into the reality of the situation with honesty,” he adds.

In the new era of sustained coffee prices, conversations with customers have become more uncomfortable. Roasters aren’t raising prices to “do better”, but to stay afloat. This shift in tone – from mission-led to survival-based – makes today’s pricing conversations more complex.

Roasters adjust their prices again

By late 2023, small-to-medium roasters in Europe were paying between US $5 to $6/lb for specialty green arabica coffee, up from around US $2.80/lb in early 2022. In 2025, prices have remained high, with the C price reaching over US $4.40/lb by February, representing more than a 70% increase from three years prior.

This sustained pressure on green coffee costs is forcing roasters to adjust pricing strategies to maintain business viability.

“The roasters I work with are adapting in ways that are both strategic and brutally pragmatic,” says Łukasz Jura, the sales manager at Coffee Machines Sale, the 2009 World AeroPress Champion, and a World Coffee Roasting Championship head judge

“They’re rebalancing blend compositions, shifting origins, and narrowing product ranges, not to cheapen the coffee, but to protect flavour and pricing stability,” he adds. “Everyone is becoming more data-driven; roasters are done with guesswork.”

While it’s difficult to adjust, such a shift in pricing is somewhat inevitable. 

“Everyone is in the same boat,” explains Salvatore Russo, the commercial director at Trabocca. “While each roaster may want to be the last to increase prices, they’ll inevitably need to or risk a drop in quality.”

Adding to the pressure is ongoing climate volatility. Coffee production in Brazil – the world’s largest exporter – has been repeatedly affected by drought and frost. Meanwhile, logistical disruptions and rising inflation rates continue to drive up costs for energy, wages, and packaging.

“We need to adjust to this new normal,” Salvatore says. “When adjusted for inflation, these ‘new highs’ aren’t as high or surprising as they initially appear.”

Confusion, pushback, and the need for clarity

Understandably, some customers and wholesale buyers are expressing confusion or pushing back on higher prices. Many of them believed they were already paying more to support coffee producers and shield the supply chain from volatility.

According to a Reuters report, major retailers in Europe initially resisted price increases, stocking out rather than absorbing costs, after green coffee prices more than doubled in a year. This highlighted widespread uncertainty over who should bear the majority of the financial burden.

“Roasters need to approach this as an ongoing conversation, not a one-time explanation,” says Julia Ahn, the Director of Business Development at roaster manufacturer Stronghold. “For wholesale clients, open dialogue backed with data helps. For retail customers, storytelling and visual content can bridge the knowledge gap.”

As coffee prices continue to remain volatile, the way roasters respond will shape both their margins and long-term relationships with customers and suppliers.

Clear and consistent communication has never been more important, but words alone are not sufficient. In a period of economic strain, consumers are paying closer attention to whether businesses live up to the values they promote.

“There’s a silver lining in the high C market: farmers are receiving better prices. It’s not just that prices are rising – it’s where the money is also going,” says Fernando Seminario, the Latin Sourcing Manager at Trabocca.

“The challenge for roasters is the speed and scale of green coffee price increases,” he adds. “Communicating clearly with clients, emphasising that price hikes are largely due to paying producers more, is critical.”

While the specialty coffee sector has long prided itself on transparency, many roasters now face the difficult task of explaining price increases that feel more transactional than mission-led. In the context of coffee, this means roasters can’t simply cite rising costs; they must show how they are responding in ways that align with their ethical commitments.

Roasters need to communicate more effectively than before

Consumers and wholesale clients are often more understanding than expected, especially when price increases are framed around preserving quality and continuity rather than profit. From social media to packaging to in-person sales calls, every channel is an opportunity to reinforce these messages.

This could include publishing breakdowns of sourcing and import costs, highlighting how margin pressures are shared across the supply chain, or explaining steps taken to minimise price increases, such as blend reformulation, advance contracting, or reduced internal margins. 

“The best conversations are simple and clear,” says Łukasz. “You don’t need a marketing campaign, just an honest explanation. And then back it up by keeping the product excellent.”

However, transparency also extends beyond customer-facing messaging. For those who have built reputations on direct trade and ethical sourcing, consistency under pressure is critical.

“Now is the moment to prove the value of your relationships and ethics,” says Salvatore. “If you’re quick to switch suppliers to save a few cents, what was the relationship really worth?”

While price increases may be unavoidable, there are still ways to mitigate their impact. Some roasters are adapting blend profiles, exploring new origins, or offering smaller-sized products to save costs. 

Others are revisiting packaging design to highlight transparency, adding QR codes or inserts to explain sourcing and costs, or investing in more efficient operations.

“The right roasting technology can significantly reduce labour needs without compromising output,” Julia explains. “Automation doesn’t mean losing control; it means freeing up human resources to focus on quality and customer engagement.”

However, many believe that exceptional coffee – both in terms of quality and monetary value – still exists for roasters, although planning ahead is what is truly integral to their long-term success. 

“Regular check-ins with your importer are essential in this volatile market,” Salvatore says. “Conditions change rapidly, and opportunities arise often.”

Roasters who are honest about their challenges, transparent in their practices, and consistent in their values are more likely to emerge with their customer base – and reputation – intact. 

“We’re transitioning from a growth phase fuelled by cheap capital and low-cost, high-quality coffee into a more mature, financially demanding era,” Greg says. “But that doesn’t mean our values are obsolete; they must evolve.”

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These figures have sparked debate across social media and news commentary, often framed as a direct result of coffee becoming more expensive to source. However, this narrative oversimplifies the complex web of operational costs that shape retail prices in the coffee sector.

Although the C price reached record highs earlier this year, linking coffee shop prices directly to green coffee costs tells only part of the story. The reality is far more complex, and unless coffee businesses are willing to discuss the many factors influencing their prices, they risk alienating the very customers they rely on.

I spoke to Samantha Scoles at BRITA UK to learn more.

You may also like our article on how much coffee shops should raise their prices.

It’s not just coffee prices that are rising

Green coffee prices reached their highest recorded levels earlier this year, exceeding US $4/lb. However, while raw material costs are important, they account for only a fraction of a coffee shop’s total expenses. Rent, wages, packaging, energy, and milk have all experienced significant price hikes since 2020, and these increases inevitably impact coffee shop prices.

Despite market realities, recent media coverage often oversimplifies the reasons behind rising prices. In doing so, it risks damaging public perception of coffee businesses.

“As coffee prices rise, customers are becoming more discerning, seeking quality over quantity,” says Samantha Scoles, the sales director at water filtration brand BRITA UK, which caters to coffee shops. “Now more than ever, it’s crucial for coffee shops to avoid cutting corners, especially when it comes to the quality of water used in brewing, as this directly impacts the overall coffee experience.”

In this climate, transparency becomes critical. Coffee shop owners and roasters need to help consumers understand why prices are going up, not as an excuse, but as an effort to preserve quality and sustainability.

“Coffee shops are feeling the pressure to manage rising costs on their own, but as consumers, we need to recognise the importance of supporting independent coffee shops and the broader industry,” Samantha adds. “If we want to ensure its long-term survival, it’s crucial that we stand behind these businesses now more than ever.”

In a recent CNN live report, roaster and coffee content creator Kat Melheim reiterated this sentiment. She believes that many coffee businesses feel torn between their need to raise prices to match the market and their fear of losing business to consumers unwilling to pay more for coffee.

“I’m hearing from roasters that they’re afraid to raise their prices – but the problem is that green coffee prices are at an all-time high,” Kat said in the report. “In order to stay in business and support coffee farmers, they will need to raise their prices.” 

Coffee has long been an undervalued commodity. For many consumers, it’s considered too expensive; however, for farmers, coffee production doesn’t provide a sustainable income.

Research shows that many customers are happy to accept higher costs when they understand where their money is going, especially when they feel they are supporting businesses that offer traceable, sustainable, and community-driven experiences.  

Yet if the narrative focuses only on green coffee costs, which is understandable given coffee’s historic undervaluing, it risks undermining the broader value delivered by skilled baristas, hospitality staff, and independent cafés.

Communicating value and building trust

Price increases are rarely short-term. Various reports note that spikes in the C price take about a year to fully reach consumers, and the impacts can linger for up to four years. As such, businesses must prepare for sustained higher costs in the long term, and consumers deserve clarity on what these costs mean.

Samantha highlights the need for such transparency and adds that by positioning price changes as a path to quality and longevity, operators are more likely to maintain customer loyalty.

“It’s important to have transparency with your customers about why prices are going up,” she says. “Ultimately, it’s a story that everyone in the coffee industry should share, no matter the size of their business.

“In the face of cost-cutting pressures, it’s critical that coffee shop owners avoid taking shortcuts in the short term that could compromise quality,” she adds. “It’s essential to deliver a consistent, exceptional experience each time customers visit to ensure they keep coming back for more.”

Sensationalising price increases or blaming a single cause can backfire. As media narratives continue to explain price increases without providing sufficient context, this could further erode the public’s trust in the coffee sector.

Some headlines have claimed that consumers will soon need to pay “up to AU $12 for a cup of coffee” – an exaggeration that grabs attention but can distort the conversation around real cost drivers.

Still, coffee shop owners must tread carefully. If consumers deem coffee too expensive to justify as a regular purchase, they may opt to drink it at home or switch to more affordable options. Many roasters and coffee shops are already seeing more customers treat café visits as an occasional treat rather than a daily or regular habit.

For operators, this means the pressure is on to make each visit count. It’s not just about pricing strategy; it’s about ensuring that every customer interaction reinforces value and loyalty. This could mean elevating service, improving consistency, or focusing more on community-building efforts that help customers see a café as a space they’re proud to support, even at a higher price point.

Shifting the conversation for consumers

As the conversation about rising coffee shop prices continues, businesses must shift the narrative. The cost of running a café in today’s climate is shaped by everything from energy prices and milk inflation to labour shortages and packaging costs.

In this context, Samantha advises that communicating value isn’t just about explaining or contextualising pricing – it’s also about creating a reason for customers to return. 

‘Offering customers a consistent experience – where they feel like they are getting value and a great product – will be vital in ensuring their loyalty,” she says. “Consumers don’t want to see their favourite local coffee shop close due to price hikes, so giving them a great product and experience will be pivotal in protecting the future of these businesses.” 

Rather than focusing solely on cost, businesses should frame pricing changes as part of their broader mission. This could include investing in quality, supporting producers, paying staff fairly, and contributing to their local community.

“By framing the price increase as a means of sustaining quality and business viability, consumers are more likely to understand and continue supporting their local coffee shops,” Samantha says.

Customers, especially those who drink specialty coffee, are likely to have a baseline understanding of why prices are rising and why higher coffee shop prices are justified. Still, the onus is on coffee shop operators to provide further explanation.

In a landscape where inflation affects nearly every consumer good, coffee shops are far from alone in raising prices. 

But they have a unique advantage: their product connects people. If businesses can share their story honestly, they’re more likely to retain not just their customers, but also their credibility.

Enjoyed this? Then read our article on why roasters and coffee shops need to strategise menu pricing.

Photo credits: BRITA Professional, Batch Baby

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At the same time, coffee consumers are growing more price-sensitive. Inflation and economic uncertainty have impacted household budgets worldwide, prompting consumers to reconsider their daily spending. Yet, quality coffee remains an essential ritual for many. 

This tension between rising costs and maintaining affordability is forcing coffee roasters into a difficult balancing act. While some businesses may choose to absorb these additional expenses, there are limits to how much they can sustain. Meanwhile, others are considering passing some of the burden onto consumers through higher coffee shop prices.

I spoke to Jacob Park of Maru Coffee and Sandra Loofbourow at Openflor and Loupe Coffee to learn how roasters can strike a balance between absorbing costs and increasing their prices.

You may also like our article on how price volatility is shifting roasters’ priorities.

Rising coffee prices – and more

From escalating energy bills to higher wages and the growing expense of green coffee, roasters are feeling the squeeze from every direction. Absorbing these additional costs can erode already tight margins, while raising prices too sharply may alienate customers.

There are many reasons behind rising prices, especially for roasted coffee. Climate change is having a significant impact on production, with erratic weather patterns leading to lower yields in key producing countries such as Brazil and Colombia. Challenges from market volatility, high demand, and shipping difficulties have further compounded the issue. 

Additionally, certified stockpiles are also running low; ICE warehouse inventories dropped below one million bags earlier this year. When supply tightens but demand stays high, prices inevitably rise, adding further pressure across the coffee supply chain.

Roasters are also grappling with higher operational costs. Energy prices remain volatile, labour costs are increasing as businesses compete for skilled staff, and sustainable materials often carry a premium price tag. Even borrowing costs are climbing, with higher interest rates making loans and credit facilities more expensive.

All of these conditions put coffee roasters in a difficult position, forcing them to absorb additional costs or pass them on to customers.

The balancing act for coffee roasters

Raising prices feels inevitable for many businesses, but it’s a delicate decision. Roasters need to weigh the risk of alienating loyal customers against the financial strain of absorbing higher costs. The challenge lies in finding a pricing strategy that maintains customer trust while securing the financial health of the roastery.

“One big advantage of raising prices is keeping your business intact,” says Sandra Loofbourow, the co-founder of Openflor Coffee and a coffee consultant at Loupe Coffee Consulting. “But an obvious risk is pricing current customers out.”

For coffee roasters navigating rising overheads and deciding whether to increase prices, finding the sweet spot is crucial. An overly aggressive increase could drive consumers towards more affordable alternatives, especially since many already perceive coffee as a daily expense rather than a luxury. 

“There’s a long-standing perception, largely held by older generations who aren’t familiar with specialty coffee, that a cup of regular drip coffee should never cost more than US $5,” says Jacob Park, a co-founder of specialty coffee roaster Maru Coffee in Los Angeles, California. “If the price exceeds this level, many customers may feel it’s not worth the value.”

At the same time, keeping prices too low can erode profitability to unsustainable levels, threatening the long-term viability of the business. 

“If the price is too low, the profit margin may suffer, but sales could increase since many customers look for cheaper options,” Jacob adds. “On the other hand, if the price is too high, it’s very hard for customers. Coffee is a daily ritual for many, and if customers have to think about their financial situation while enjoying their coffee, it takes away from the experience.”

While consumers may feel the pinch of rising coffee shop prices, much of the pressure originates further upstream in the supply chain. For decades, coffee producers have retained only a small fraction of the final retail price of coffee, despite specialty coffee markets promising higher returns for better quality.

“Coffee has been historically undervalued, with producers retaining incredibly small amounts of the value created by their product; the ‘dramatic’ market shifts we’ve seen in the past year have not changed this fact,” Sandra says. “Coffee is part of our daily lives, but the people who produce it still deserve a living wage. 

“As an industry, we must shift our focus away from extraction and towards creating shared value across the supply chain, including with consumers.”

Transparent pricing and brand trust

One way to ease the tension of rising coffee shop prices is to be transparent with customers about the reasons behind the increases. Several studies suggest that openly sharing the realities of increased costs can also lead to a more positive perception of price fairness. Such transparency helps manage expectations and reinforces trust, especially in times of economic uncertainty. 

Educating consumers about these factors not only fosters understanding but also builds a stronger emotional connection with the brand, making customers more willing to accept incremental price adjustments.

“A lot of marketing around specialty coffee already relies on the idea of ‘transparency’ – usually backwards through the supply chain to the producer,” Sandra says. “Now is a great time to share that transparency upstream, too. Speak frankly about these challenges with your customers, and consider offering price transparency to them as well.”

Jacob agrees that providing a better experience can help justify higher prices. When customers perceive that they are paying for quality – not just in the cup, but in the overall experience – they are more likely to view the price increase as justified. This perception of quality can be a powerful tool in maintaining customer loyalty, even as costs continue to rise.

“People who aren’t familiar with specialty coffee often undervalue it, and many of us in the industry have been working hard to break that perception,” he says. “Beyond just changing that mindset, we also need to show everything that sets us apart: thoughtful interior design, a clear dress code, great customer service, information about coffee, transparent sourcing, the use of high-quality beans, and how we present everything.

“Only then can everyday customers truly recognise and understand the difference.”

Sustainability also plays a role. Eco-friendly practices can appeal to ethically minded consumers, who may be more willing to pay higher prices if they believe their purchase supports environmental responsibility. Highlighting efforts such as compostable packaging or low-emission roasting can strengthen a brand’s appeal and justify premium or increased pricing.

“The threat of climate disaster is usually not enough to shift consumers away from the most convenient (or cheapest) choice,” Sandra says. “However, we know that perceived morality can increase a customer’s loyalty to one brand over others.

“If transparency and sustainability are part of your brand messaging, it’s likely your customers are trusting that you make eco-conscious decisions on their behalf, even if they’re slightly more expensive.”

Diversifying to reach new customers

For coffee roasters, there’s no avoiding the reality of rising expenses, but the question remains whether to absorb these costs or pass them on to consumers via price increases. 

Some roasters are responding to the challenge in another way, diversifying their offerings. Such measures enable roasters to expand their reach without compromising their leading brand’s premium positioning.

The launch of more affordable sister brands, such as Madcap Coffee’s ‘Dito’, is one example. Many brands are targeting younger and price-sensitive consumers with simpler packaging and more accessible price points, while preserving the premium position of their coffee products. 

Regardless of whether roasters choose to raise prices, absorb a margin hit, or diversify, price rises are inevitable, and consumers can generally expect to pay more for coffee in the coming months and years.

A hybrid approach may offer the most sustainable solution. Gradual, transparent price increases combined with efforts to manage operational costs can help spread the financial pressure without alienating customers.

“It’s possible that some adjustments, like a heavier reliance on lower-quality or commercial-grade coffees, could soften the impact on consumers,” Sandra says. “But then there’s the fact that production is trending down, and will likely continue on that trajectory thanks to many compounding factors.”

Ultimately, the decision hinges on roasters understanding their customers and margins. Those who clearly communicate the reasons behind pricing changes and continue to deliver value — whether through quality, sustainability, or customer experience — are more likely to retain trust.

For now, a careful mix of transparent communication, incremental price increases, and diversified products could help coffee roasters navigate rising coffee prices and higher operating costs. In a challenging economic climate, striking this balance will be crucial for coffee roasters seeking to secure longevity.

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For roasters and coffee shop owners alike, raising prices is no longer a choice but a necessity. Understanding what drives these price changes, how coffee consumers are responding, and what alternatives exist is essential for businesses aiming to remain sustainable in a volatile market.

I spoke to Darleen Scherer at Black Sheep and Kirk Pearson at Project Zero Coffee to discuss the pros and cons of raising retail coffee prices and how price hikes could impact consumer behaviour.

You may also like our article on why price volatility means roasters’ priorities are shifting.

Why are coffee prices staying so high?

Several factors are contributing to rising coffee prices. Green coffee costs, particularly for arabica, have recently skyrocketed due to adverse weather conditions, supply chain disruptions, and market speculation.

“We’ve seen green coffee prices surge to 47-year highs, with arabica hitting over US $4/lb – a 70% increase in just one year,” says Darleen Scherer, the founder of Black Sheep coffee consultancy, who has over 20 years’ experience working in the industry. “Add to this rising shipping costs, energy inflation, increasing wages, and tariffs, and the entire industry has been forced to rethink pricing strategies.”

Many roasters are reassessing their entire operations to ensure financial sustainability while maintaining quality standards.

For small and medium-sized businesses, especially, absorbing these rising costs indefinitely is simply not viable. Commercial-grade coffee businesses have also been hit particularly hard by these increases, narrowing the price gap between commodity-grade and specialty coffee. 

As a result, it has arguably never been a better time to encourage more consumers to switch to specialty offerings. However, convincing customers to pay consistently higher prices has its challenges.

The risks and rewards of raising coffee shop prices

For many coffee shops and roasters, raising prices is a matter of survival – as overhead costs increase, so too must their prices in order to stay afloat. However, sharp price increases often don’t bode well with consumers and can drive them into the arms of competitors. 

Rather than implementing steep price hikes all at once, many are making regular, smaller adjustments. This softens the blow for coffee consumers and opens conversations about sourcing and value.

“I’ve seen successful roasters adopt more dynamic pricing models that respond to market volatility rather than absorbing costs indefinitely,” Darleen says. “This prevents the shock of sudden large price increases for customers while also helping offset the upcoming tariff impacts that would otherwise require dramatic price adjustments.”

Aligning pricing with operating costs is crucial for coffee businesses hoping to maintain healthy margins and invest in quality. While higher prices can risk alienating some customers, they also reflect the reality of doing business in an increasingly costly environment. Roasters and coffee shops that communicate value effectively and maintain high standards are more likely to retain loyal coffee consumers, even in the face of price increases.

“We already sell some of the most expensive coffee in our area and have a customer base that grows every week, thankfully,” says Kirk Pearson, the co-founder of Project Zero Coffee in Melbourne, Australia. “Value doesn’t come down to coffee being cheap, but if the coffee is repeatedly excellent, then the customer knows they can get the value they’re looking for.

“Let’s say there are two cafés. One sells coffee for AU $4.50, and the other for AU $6,” he adds. “If the cheaper café delivers great quality only three out of ten times, while the more expensive one does so nine out of ten times, which offers better value?” 

However, there are downsides to raising prices. One major challenge is that prices, once raised, can rarely be lowered again, even if market conditions improve. This can make it difficult for businesses to stay competitive should consumer expectations shift.

Additionally, raising prices can drive customers towards competitors that offer lower prices (also known as penetration pricing) in a bid to position themselves as the more cost-effective option.

How are coffee consumers responding?

Rising coffee shop prices inevitably prompt changes in consumer behaviour. Some coffee consumers are visiting cafés less frequently, treating specialty coffee as an occasional indulgence rather than a daily habit. 

According to the National Coffee Association’s most recent National Coffee Data Trends 2025 report, at home remains by far the most popular place to prepare coffee; 71% of past-day coffee drinkers had coffee prepared at home only in 2025, compared to 63% in 2020. In contrast, 13% had coffee prepared both in and out of the home, compared to 19% in 2020.

“The consumer response has been mixed but generally more understanding than expected,” Darleen notes. “Most coffee drinkers recognise that inflation is affecting everything, not just their morning cup of coffee. When roasters and coffee shops communicate price increases transparently, acceptance tends to be higher.”

Kirk echoes this sentiment. He observes that although they are mindful of their spending, most consumers are aware of the global economy at large and are willing to spend money on things they value highly, including coffee. 

“It’s hard not to notice things that are causing price rises,” he says. “No one likes paying more for things, especially for coffee; however, people understand that inflationary costs have affected everyone. The general response has been quite understanding, and the people who would be upset by price rises tend not to come to our café anyway.”

But this understanding doesn’t mean consumers are limitless in their spending power. There is still a threshold of what they consider reasonable, shaped by broader economic conditions, personal budgets, and perceived value. 

Some consumers are opting to brew coffee at home more frequently, while others are switching to blends and more affordable single origin coffees.

Can coffee roasters delay price hikes?

It was only a few months ago that Starbucks CEO, Brian Niccol, announced a price freeze for the fiscal year to aid consumers with rising costs. With unprecedented price surges and rapidly enforced new tariffs announced since the start of 2025, it is a commitment they will likely need to back out of. 

In an attempt to hold off on raising prices, some roasters and coffee shops have been seeking savings elsewhere, such as investing in more energy-efficient equipment and low minimum order quantity (MOQ) sustainable packaging. Meanwhile, many have been forced to suddenly absorb additional costs in an attempt to maintain customer loyalty and delay inevitable price increases.

Darleen believes that while such cost-saving measures can be effective in the short term, inevitably, a conversation needs to be had with consumers about how and why prices will increase. 

“The most successful approach I’ve seen is when roasters are transparent about these adjustments, explaining that they’re trying to balance affordability with quality,” she explains. “Many are also managing their inventory more tightly to help manage cash flow.” 

While temporary measures can provide breathing room, they’re not a long-term solution. For many businesses, passing some of the increased costs to coffee consumers remains one of the few sustainable strategies, especially as climate change and geopolitical instability continue to drive uncertainty in coffee supply chains. 

“We have continued to invest in our coffee quality and in improving our customer experience,” Kirk explains. “Our approach has been to double down on the things that make us who we are, not try to cut costs. So far, it has worked.”

Operational improvements, such as upgrading equipment and implementing automation, can also help offset rising costs.

“The investment in the machinery when we opened is paying off now, because we run with less staff, and deliver coffee more consistently and with ease,” he says. “Automation gives us a cost advantage relative to other coffee shops because we can make it that much more efficiently.” 

Meanwhile, other businesses have sought external funding or government support to weather these challenges, tapping into local enterprise initiatives or grants aimed at helping small businesses improve energy efficiency or manage overheads.

Will transparency help justify higher coffee prices?

Some roasters have embraced transparency to explain higher prices to coffee consumers. By breaking down the cost of each stage in the supply chain, from farming to roasting to brewing, they aim to demonstrate just how slim margins really are — and how much of the final price supports producers and operational sustainability.

“The most successful roasters openly share their sourcing practices, pricing structures, and the challenges they face,” Darleen says. “This radical transparency builds trust and helps customers see the relatively small margins that most coffee businesses operate on.”

Kirk, meanwhile, offers a more pragmatic perspective, claiming that customers care more about the quality of the product served to them rather than the justifications around price increases. 

“My thoughts on this are evolving as the economic times become more uncertain and coffee supplies decline,” he says. “The modern coffee consumer is quite attuned to what good coffee is and why the good stuff costs more. If you’re delivering the coffee to a high standard, people will pay for it.”

He adds that the focus should remain firmly on value and has been vocal in his view that coffee prices ought to be based on real factors, not “arbitrary figures”. In his own venue, he explains that the strategy is to buy high-quality coffee and not to deviate from that, regardless of the final price that consumers pay.

Coffee prices are unlikely to drop significantly any time soon. For roasters and coffee shop owners, the challenge lies in balancing rising operational costs with delivering consistent value to consumers. Ultimately, success lies in thoughtful pricing strategies, effective communication, and a commitment to quality. 

“The key factor isn’t necessarily the absolute price but the perceived value,” Darleen concludes.  “Customers ask themselves: ‘Is this experience, this flavour, this moment, worth the premium I’m paying?’ 

“When the answer is yes, they’ll continue to pay higher prices.”

Coffee roasters who can clearly communicate their value while maintaining high standards will be best positioned to navigate these turbulent times. Even as coffee shop prices rise, many consumers remain willing to pay for quality, as long as every cup delivers on its promise.

Enjoyed this? Then read our article on how roasters can compete on more than price.

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As the restaurant plans to close its doors for regular service in 2025, this new venture marks a strategic pivot into more accessible territory while preserving its commitment to quality, craftsmanship, and innovation. 

This subscription service is not a one-off gimmick. Instead, it’s part of a broader plan to diversify the restaurant’s offerings beyond fine dining. As coffee prices rise and global consumption continues to grow, more hospitality businesses are likely to follow suit, exploring new ways to incorporate specialty coffee into their brand identities.

I spoke to noma’s head of coffee, Carolyne Lane, to learn more.

You may also like our article on how specialty coffee has raised the bar in hospitality.

Specialty coffee & fine dining: A perfect fit

For many consumers, specialty coffee serves as a more accessible entry point into the world of gastronomy and fine dining. And for noma, which has long pledged to serve world-class coffee, its recent formal transition into the specialty coffee landscape feels both natural and deliberate. 

Over the years, noma has collaborated with industry leaders such as Tim Wendelboe and now staffs a team that includes a former head roaster from Berlin’s Bonanza Coffee. 

“I was impressed by the coffee setup when I first started,” says Carolyne Lane, the restaurant’s head of coffee. “Back then, it was even unusual for a coffee shop to measure extraction and strength and to dial in to such a precise degree.”

However, it wasn’t until they worked with Tim on a bespoke brewing method, the Nomacano, that the idea of roasting their own coffee took shape. 

“Tim approached us and asked when we were going to roast for ourselves,” Carolyne says. “It felt like the push, or permission, we needed.”

Initially roasting on a 3kg machine, Noma Kaffe scaled and moved to a co-roasting space used by other respected Danish brands such as April Coffee Roasters and Prolog. 

Carolyne explains that the decision to launch a subscription service is a way to build a stable foundation for offering exceptional yet sustainable coffees.

“A subscription made a lot of sense because it’s a relatively static and straightforward model – you roast the coffee, you send it out,” she says. “From this, we can gauge how we can grow in a way which feels sustainable; the first of anything will always generate a lot of hype and give you a disproportionate representation of what the actual demand for that product is.”

Sourcing coffee

Limiting initial sales to a subscription-only model helps mitigate risk for restaurants, especially those which are new to roasting. For noma, the idea was to also build from a model that could grow steadily and ethically, with enough structure to support long-term relationships with producers. 

The approach to work more sustainably also shaped the direction of its sourcing. The first subscription featured coffees from Ethiopia and Mexico, two origins that hold special significance for the restaurant. 

Ethiopia was the first coffee origin that the team visited in 2018 with Tim Wendelboe, and represents a strong link to genetically diverse coffee landscapes that mirror their passion for wild foraging.

“The notion that Ethiopia is the birthplace of coffee is alluring, and as a company that cares about wild ingredients, this makes a lot of sense,” Carolyne says.

Meanwhile, the relationship with producers in Mexico dates back to noma’s pop-up in Tulum in 2017. “The coffee from Tenejapa made such a huge impression on me because it’s so floral and bright, I could have sworn it was from Kenya,” she adds.

Rethinking coffee for restaurant service

Although it may not be its primary focus, coffee sales are a significant driver of revenue within the restaurant industry. According to World Coffee Portal, the global foodservice coffee market is expected to reach over US $748 billion by 2032, growing at a compound annual growth rate of 6.2% each year.

Restaurants across various categories, from fine dining to fast food, are increasingly incorporating coffee into their offerings. Jollibee Food Group, for instance, acquired stakes in Botrista in the US and Compose Coffee in South Korea in July 2024, marking significant steps in the company’s efforts to enhance its offerings through convenience and automation and expand into key coffee markets.

Outside of quick-service and fast-casual dining venues, adopting a convenience-focused approach to coffee may not always be the most effective strategy. Carolyne notes that many casual and fine dining restaurants attempt to replicate a coffee shop experience; however, as table service requires meticulous timing, she explains that restaurants have different needs when it comes to coffee service.

“The optimal scenario is that you clear the penultimate dessert from the table, and within one minute, you serve the coffee. Within another minute, the last dessert hits the table, but this level of service is highly demanding of staff,” she says. “When all of your guests are seated at the same time, they’re more or less on the same dishes at the same time. So in half an hour, 40 minutes, you’re expected to expedite dozens of coffees? That’s impossible.”  

To overcome this issue, noma worked with Tim Wendelboe to develop a unique brewing method, which allows staff to prepare filter-style coffee using an espresso machine. This means staff can brew larger volumes of coffee with a more consistent flavour profile and efficient workflow.

“We were able to serve a beverage at the right ‘strength’ for a method that uses half the amount of coffee per cup, which means you can buy better and more expensive green coffee,” Carolyn explains.

Will other restaurants follow suit?

While few restaurants have the resources or knowledge to launch a coffee roasting programme of noma’s scale, its foray into subscription services could inspire other food service businesses to reconsider their approach to coffee. 

Other fine dining restaurants, such as Alinea in Chicago, have long had a dedicated coffee programme and a “chef de caffeine”, but have yet to launch subscriptions or roast their own coffee.

The demand for premium and speciality coffee options is increasing, providing a wide range of restaurants with opportunities to boost revenue by catering to this trend. 

Some may follow a more accessible path by partnering with established wholesale roasters or developing private-label products. The UK’s Japanese-inspired chain Wagamama recently partnered with London’s Grind to offer premium coffee options, underscoring how branding and coffee quality are increasingly aligned in the food service industry.

While lucrative for restaurants, allowing them to diversify their revenue streams, Carolyne points out that the specialty coffee industry can also benefit from a growing focus on premium coffee in food service.

“There was more innovation in the first ten years of the specialty coffee movement than there is now, so I think there’s a lot of room for fresh perspectives,” she says.

But it requires a nuanced approach

As more restaurants experiment with specialty coffee offerings, it remains to be seen who will successfully navigate the industry’s complexities, especially as coffee prices continue to rise. 

Ultimately, it will come down to brand identity and values. For noma, coffee is an opportunity to reimagine its legacy beyond the restaurant walls, offering a more accessible product that mirrors its broader philosophy of quality and attention to detail.

But for other venues, convenience could be equally important as quality. Investing in fully automated systems that minimise workload and require less coffee knowledge and expertise to operate could be the best solution for these businesses.

Carolyne believes that restaurants can offer a unique perspective on coffee, one that can differ from the standard products available in coffee shops. 

Looking ahead, consumers’ growing demand for premium coffee options could reshape how restaurants engage with coffee, not just as a beverage, but as a core part of their culinary identity.

Enjoyed this? Then read our article on why coffee shops need to prioritise hospitality in an era of convenience.

Photo credits: Noma Kaffe

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When prices rise, roasters must pay more for coffee, whether they are purchasing spot coffee or negotiating future contracts. However, smaller roasters often have fewer resources and less capacity to manage this risk effectively. This leaves them particularly vulnerable during periods of market instability. 

Without forward planning, they risk higher costs, limited supply options, and difficulties in maintaining consistent quality. Many small roasters have already been forced to close due to poor cash flow management and rising prices, leading to fundamental shifts in the industry.

I spoke to Chris Kornman, Director of Education at Royal Coffee, and Richard Keane, Head of Sales Operations at Balzac Brothers & Company, to find out how smaller roasters can mitigate risk while still sourcing high-quality coffee.

You may also like our article on how roasters are managing cash flow with higher prices.

The impact of rising coffee prices on roasters

A rising C price affects all roasters, but its impact largely depends on their purchasing strategy. As prices rise, smaller roasters may struggle to secure contracts with favourable terms, particularly when importers prioritise larger buyers who can commit to bigger volumes. 

Unlike larger roasters that have financial mechanisms in place to hedge against price fluctuations, smaller businesses often rely on short-term purchasing strategies. This dynamic often leaves smaller businesses at a disadvantage, forcing them to purchase coffee at higher rates or settle for lower-quality options. 

“Most small roasters buy coffee in small increments to last them at most a couple of months,” explains Chris Kornman, the Director of Education at green specialty coffee importer Royal Coffee in California, US.

“When market prices go up, they need to pay more for that coffee just like everyone else. Most small roasters are already paying more per pound than large roasters who can buy in bulk.” 

Additionally, unexpected price increases can lead to cash flow constraints, making it harder for small roasters to invest in marketing, equipment upgrades, and staff training, ultimately affecting their long-term growth and stability. Roasters who purchase coffee on the spot market must adjust to price increases immediately. Those who have locked in contracts based on previous C market levels may find themselves paying above-market rates if prices drop, making their coffee more expensive than competitors who are buying at the current lower rate.

Chris explains that most small roasters buy coffee in small increments to last them at most a couple of months – and unlike larger roasters who purchase at and are somewhat protected by scale, increases in market prices may disproportionately affect smaller roasting businesses.

“Small roasters are subject to the whims of market volatility, which can be risky, but they also aren’t moving container loads of coffee every day, so the risk is mitigated by scale,” Chris adds.

This puts smaller roasters in a precarious position. Without the ability to hedge or plan forward, they are more susceptible to sudden price spikes, making it harder to maintain stable pricing for their customers.

Why smaller roasters are at greater risk

Market volatility is persistent at the moment, compounded by political instability. On 2 April, in a shocking yet predicted move, US President Trump announced sweeping tariffs on more than 180 countries. There is a universal 10% tariff on any imports coming into the US. For some countries, including major coffee-producing nations like Vietnam, Indonesia, and India, the “reciprocal” tariffs are higher.

Despite Trump’s claims that other countries pay for price hikes, it will be US importers that foot the bill, which will inevitably trickle down to consumers. Many products, including coffee, will become more expensive in the US in the coming months.

While US roasters are already feeling the effects of high coffee futures, they must now prepare to cover even pricier costs of goods as tariffs ranging from 10% to as high as 46% come into effect. 

Hedging is a financial strategy that larger coffee roasters and traders use to protect themselves against price fluctuations in the coffee market. It is a standard management tool for large businesses seeking to avoid risk.

As smaller roasters often lack the resources to engage in hedging strategies, this leaves them exposed to price fluctuations – an increasingly common occurrence in a volatile coffee market.

“Hedging for any commodity, like coffee, requires a substantial amount of capital and expertise to manage,” says Richard Keane, the Head of Sales Operations at green specialty coffee importer Balzac Brothers & Company in South Carolina, US.

Many smaller roasters have assumed that the C market would remain relatively low, making them ill-prepared for sustained high prices. When coffee prices rise unexpectedly, these businesses face cash flow issues and must make tough decisions about passing costs on to customers or absorbing losses.

“If they don’t leverage future contracting or hedging, then roasters or coffee buyers can leave themselves extremely vulnerable to price volatility. The availability of coffee is also a huge risk if roasters do not manage future contracts and hedging properly,” Richard says.

“The current market has made it very difficult to find spot coffees that suit everyone’s needs, so working with your importer to ensure current and future coffee needs are met before it is too late can help roasters gain a competitive advantage.”

Strategies to mitigate price risk

One way for smaller roasters to manage price risk is by closely monitoring origin-specific pricing trends. Understanding upcoming harvests, supply shortages, and quality variations allows them to make more informed purchasing decisions. 

In addition, sourcing coffee from different origins can help roasters navigate market fluctuations and avoid excessive dependence on one region. Such diversification can also prove useful in garnering more interest from consumers who prefer to buy a wider variety of coffees.

Flexibility in sourcing can also help to manage cost fluctuations. When prices in one region rise, switching to another producing country with similar flavour profiles can help maintain margins.

“Flexibility and adaptation should be the norm for a small roaster’s green coffee supply,” Chris advises. “Under normal market conditions, a small roaster should have their inventory needs covered for two to three months.”

Building strong relationships with importers also provides financial and logistical benefits. Importers can also aggregate smaller hedges for multiple clients, offering smaller roasters some of the benefits of hedging without requiring them to take on large contracts themselves. 

“The advantages of good importer relationships start with honest conversations about risk, not taking on too much expensive coffee, and an assurance that everyone everywhere is dealing with the same problems,” Chris says.

Many supply chain facilitators, such as importers, are typically more willing to allow price flexibility and assumption of risk if they know that a roasting business is willing to invest in the same producer year after year. The implication is that if an importer can count on a roaster’s repeated investment, the risk for producers and importers is mitigated. 

“Repeatable and sustainable business is significantly more valuable to the farmer and the importer when compared to one-time high cost ‘impulse’ purchases from roasters,” Richard says. “As a roaster, you should think of your coffee purchases as a vote for the producer to continue to invest in their farms and to establish repeatable quality for every seasonal cycle.” 

In an attempt to circumvent potential issues with supply chain actors, some roasters turn to direct trade to secure stable pricing and supply chains. However, this approach also comes with its own risks. Regulatory compliance, contract execution, and financing are all challenges that roasters must be prepared to navigate. 

“Direct trade can be a great way for roasters to connect with the folks who are the most vulnerable to price volatility and industry changes,” Richard says. “But if roasters manage the entire importing process by themselves, they can be exposed to a plethora of obstacles.”

With ongoing market volatility, smaller roasters must take proactive steps to mitigate risk. Establishing strong importer relationships, staying informed about origin market trends, and maintaining sourcing flexibility can help ensure long-term sustainability. 

Many roasters are already shifting their strategies, focusing on alternative origins and cost-effective sourcing methods to remain competitive. While they may not have the same resources as larger companies, strategic planning and industry partnerships can provide a safety net during periods of uncertainty.

By embracing these approaches, smaller roasters can better navigate price fluctuations and continue offering high-quality coffee to their customers without compromising their financial stability.

Enjoyed this? Then read our article on why roasters have to compete on more than price alone.

Photo credits: Royal Coffee, Balzac Brothers & Company

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It’s challenging to say the least. An estimated 62% of specialty coffee shops close within the first five years of business, while key players capture most of the market share. Global specialty coffee consumption grows year-on-year, but still remains a small segment of the wider industry.

Logistical challenges and price volatility also make it difficult to manage increasingly tight margins. So in the wake of near record coffee prices and rising inflation, a small but growing number of roasters are choosing collaboration over competition.

During times of economic uncertainty, partnering with competitors on collaborative releases and long-term strategic partnerships can be a smart business move. Miranda Caldwell, founder of The Coffee MBA, explains why it has the potential to reshape the landscape of specialty coffee.

You may also like our article on why roasters can’t rely on coffee price drops.

A new era of collaboration?

In the years following Covid-19, navigating the coffee market has become increasingly tough. In July 2021, severe cases of frost hit some of Brazil’s growing regions – causing the C price to skyrocket. 

A number of interconnected issues – including supply shortages and unfavourable weather conditions in major producing countries – mean prices have remained consistently high. In July 2024, New York arabica futures hit US $2.49/lb, nearly their highest level in decades. London robusta futures also reached a record US $4,971/tonne, and show no signs of dropping any time soon.

Perhaps to discreetly manage these supply chain challenges, several prominent specialty coffee roasters have recently engaged in collaborations, signalling a shift away from competition with one another.

US specialty roaster Counter Culture partnered with South Korea’s Fritz Coffee Company on the limited-edition Gemini blend. The two “like-minded” roasters exchanged green coffee from their suppliers to celebrate their “shared commitment to excellence” and co-develop a blend that brings together two distinct, yet mature, coffee cultures.

Similarly, in 2023, Onyx Coffee Lab teamed up with Australian-American specialty roaster Proud Mary on The Duet blend. As the name implies, both roasters combined their expertise to create a coffee that celebrates “doing more things together in this industry that we all love”.

So why now?

Collaborations aren’t new to the coffee industry. Actors, athletes, and musicians have long partnered with companies to co-develop products, or even launch their own brands. Collaboration between roasters, on the other hand, is considerably less common.

The above examples highlight a growing trend where collaboration is becoming a strategic choice for roasters looking to innovate and expand. But why are these partnerships becoming more popular now?

One prominent reason is the increasing difficulty and cost associated with innovation, particularly when trying to expand into new markets. Like many others, the specialty coffee industry is facing significant challenges related to price volatility and inflationary pressures. 

These economic factors make it risky and expensive for individual roasters to invest in product development or market expansion on their own. But through collaborative partnerships, roasters can share the financial and operational burdens of innovation, and launch new products without bearing all the risk themselves.

Miranda Caldwell founded The Coffee MBA business education platform in 2022. She has also worked for several prominent US roasters, including Verve, Counter Culture, and Madcap. 

“Specialty coffee has to start thinking like ‘big business’ in order to stay relevant in the market,” she explains. “I would argue that it’s much better for the industry if these companies join hands to stay competitive.”

Collaborations enable roasters to capitalise on each other’s success, rather than compete directly. This approach not only minimises the competitive edge, but also creates a more dynamic and innovative market where consumers benefit from the combined expertise and creativity of multiple brands.

“It’s a joint venture that allows for many things: market testing, revenue boosts, and new market opportunities,” Miranda adds. “There’s new merch, audience engagement, and cool product activations. It’s not just fun for the companies involved, it’s also exciting for consumers who can try new things.”

Embracing partnerships in a growing global market

Another factor driving the popularity of collaborations is the growing challenge of retaining brand loyalty, especially as specialty coffee becomes more globalised. 

When trying to enter new or unfamiliar markets, roasters are likely to find more success partnering with local roasters rather than competing with them. This strategy allows them to leverage the reputation and expertise of their foreign counterparts, while also offering something new to their customers.

As part of its ongoing Origin Roaster Collab project, the UK’s Square Mile recently partnered with Building Coffee in Ho Chi Minh to release its first-ever Vietnamese coffee. The collaboration offered consumers two unique perspectives on Vietnamese coffee – one from a producing country and the other from a majority-consuming market. Essentially, this creates a customer experience which neither brand could have accomplished alone.

Miranda suggests that this approach is similar to strategies employed by multinationals, where joint ventures are used to test new markets before committing to full-scale operations.

“Once it becomes clear that a market is a good fit for a business, you create a mutually beneficial partnership while opening doors to new consumers,” she says.

In July 2024, Onyx Coffee Lab and Dutch brand Manhattan Coffee Roasters announced their “International Roasting Cooperative”. Both companies emphasised how the cooperative underscores their “aligned values in terms of quality sourcing ethics, meticulous roasting, and stringent quality control standards”.

More importantly, the partnership allows both brands to expand their distribution networks and reach new customers across the globe. This is an arrangement that can better assist future expansion plans into new international markets.

“There are so many benefits to this kind of collaboration. ‘Stronger together’ is a real phenomenon,” Miranda says. “Not only do you open up your products or services to a wider audience, you increase distribution potential and, in some cases (depending on the arrangement), make use of economies of scale.”

Is collaboration the future for specialty coffee?

Looking ahead, it’s likely that collaborations will continue to play a significant role in the specialty coffee industry. As Miranda points out, roasters are increasingly forced to rethink sales strategies to stay relevant and competitive.

“Are you selling coffee, or are you selling a lifestyle, an experience, a service, education, exclusivity? There are deeper layers that only the most innovative companies have uncovered,” she says. “Nespresso beat us on convenient ‘luxury’, so where is the white space that nobody is yet serving?”

Collaborations provide a powerful tool for capturing market share and consumer attention. By teaming up, roasters can create new and exciting offerings that go beyond what they could achieve alone. This trend is not unique to coffee, however. Other industries – such as craft beer, fitness, and fashion – have seen similar success with collaborative ventures. 

“I think collaborations could be particularly successful for coffee if we start thinking outside of the box,” Miranda notes. “Fishwife collaborated with Talea to make a beer. How do beer and fish go together? Creatively – think strange and unique.”

An (un)even playing field

For established roasters like Onyx, Proud Mary, and Counter Culture, reputation alone could guarantee long-term success with new collaborations. However, it remains to be seen whether these partnerships will work as well for lesser-known roasters.

Irrespective of this, collaboration offers a way for small and large coffee brands to navigate the challenges of a competitive and rapidly changing market. The growing trend of collaboration among specialty coffee roasters reflects a broader shift in the industry’s approach to competition and innovation. Ultimately, it shows that there’s safety in adopting a more collaborative approach – rather than trying to compete in an increasingly volatile market.

“We may not know what is happening behind the scenes. In the corporate world, this could be the first step toward an acquisition or merger,” Miranda concludes. “But if you believe that rising tides raise all ships, then we should embrace collaborations in specialty coffee.”

As specialty coffee roasters continue to face market volatility and logistical challenges, collaborations may become the norm rather than the exception. This could reshape the landscape of specialty coffee for years to come.

By partnering with one another, roasters can find new ways to expand their reach, share resources, and offer consumers unique and exciting experiences. But is this also part of the wider trend of market consolidation in specialty coffee? Only time will tell.

Enjoyed this? Then read our article on how roasters can plan their menus when prices rise.

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In recent years, it has enjoyed a reputation for having some of the world’s most well-known roasters, baristas, and cafes, as well as a number of successful champions on world competition stages. 

This has been recognised by the global coffee industry, too. Around the world, “Australian-style” coffee and food service has started to become more prominent, with brunch, specialty coffee, and healthy food just some of the key traits that characterise the trend.

But what’s happening in Australian coffee today? And how are things changing? To learn more, I spoke to several Australian coffee professionals to find out how specialty coffee culture is developing throughout the country, and why the country is so renowned for it. Read on to find out what they said.

You might also like our coffee shop tour of Melbourne.

Specialty coffee: An industry standard 

Despite the fact that the country is renowned today for its coffee culture, coffee didn’t really become prominent in Australia until the mid-20th century. The country’s coffee sector largely developed thanks to the influence of Italian and Greek immigrants, many of whom moved there after the Second World War. 

The Greeks and Italians brought their love of espresso and traditional coffee brewing methods with them, and the rest was history. Their influence was particularly strong in larger Australian cities, including Melbourne, which has a reputation as one of the country’s “coffee capitals” to this day. 

It’s important to note that the modern Australian coffee sector is characteristically different to most other consuming markets. In most major coffee consuming countries around the world, independent specialty and third wave coffee businesses have something of a minor presence, and are often overshadowed by larger franchise operators.

However, in Australia, global chains such as Starbucks have famously failed to succeed in the Australian market. As such, the industry is dominated by smaller independents and boutique coffee shops. But even for these businesses, coffee is changing.

Hany Ezzat is a barista and competitor who has worked in the Australian specialty coffee sector for more than a decade. He has seen first-hand how Australian coffee culture has changed and developed in recent years.

“Machine automation has allowed baristas to take more time to focus on post-extraction variables and education for consumers,” he explains. “Experiences like tasting cards with farm information and coffees being served in different vessels to highlight different ‘elements’ are becoming more common.”

Hany adds that many roasters are now roasting coffees with specific uses in mind (i.e. milk-based drinks, espresso, and filter), and taking care to include brewing guides and traceability information. He also notes that many cafes are also abandoning traditional coffee “menus” in favour of giving customers more information about what they can expect to taste.

“Customers are becoming more used to ordering different blends and origins based on what style of coffee they like, instead of deciding whether they want a flat white or cappuccino,” he explains. 

“With these menus, the focus is much more on the origin, roast, and flavour profile of the coffee, rather than the amount of milk or the cup it is served in.”

Moving beyond specialty?

There’s no doubt that terminology like “specialty” and “third wave” are increasingly being used by coffee businesses around the world to differentiate themselves from larger chains in a saturated market. But in Australia, where chains are arguably less prominent, does this mean they’re starting to lose their significance?

Tom Beaumont is the General Manager of ONA Coffee, and has worked in the Australian coffee industry for several decades in roasting, equipment, and retail. 

He tells me that the number of businesses identifying as “specialty” is causing the term to lose its importance, and that many who use these terms are starting to splinter into different factions. 

“The concept of specialty is almost just like a standard [in Australia],” he says. “In a way, it has almost kind of lost its meaning, because everything is specialty.”

As such, Tom says that many prominent coffee businesses in Australia are now seeking to take a step beyond concepts like “third wave” and “specialty”, to take the preparation and service of coffee to new heights.

“I feel now in recent years, there has almost been a kind of specialty coffee ‘split’, as more businesses try to carve out what the next experience is,” he adds. “There are more roasters and baristas thinking ‘what is the next level of taste?’ and ‘can I be a bit more daring?’

“There’s a lot of experimentation [and] innovation. There’s a lot of suggestive ways of drinking and different ways to drink. It’s a smaller space [to work in], but I think that from a consumer end, that’s starting to get a little stronger now.”

New styles of service 

In line with what Tom notes, many coffee shops in Australia are now offering new and unusual approaches to serving coffee. These include extended menus of frozen, limited edition, and “reserve” coffees. 

Freezing whole coffee beans has become especially popular, as it allows baristas to slow down the ageing process of the coffee, keeping it ideal for use for longer periods of time.

In particular, businesses like ONA Coffee Sydney have become well-known for their extensive menus of frozen coffee beans, while Sydney roaster Toby’s Estate followed this trend with the release of their “Freezus” domestic coffee freezing pack in 2020.

These trends are supporting Australian roasters to bring more high-quality, experimental, and unique flavour profiles to consumers. Rather offering different styles of coffee (such as a flat white or latte) some coffee shop menus in Australia today read more like a wine menu, with harvest year, processing information, and tasting notes all commonly included.

Oliver James is a coffee competition judge and the owner of Tattooed Sailor Coffee Roasters in Cairns. He says that the emergence of these new service styles has been influenced in no small part by barista competitions.

He says: “I’ve noticed a direct correlation between the flavour profile of coffee served at barista competitions, particularly in finals rounds, and the flavour profiles or trends emerging in specialty coffee shops.

“I think the science of making espresso is broadly known and understood [now], and I can see firsthand that competitions are really driving many of these changes.”

Coffee prices and consumption

Along with these innovations and new methods of serving coffee, the Australian coffee market has seen widespread price increases, particularly for the consumer. 

In 2017, reports showed that the average price of a cup of coffee in Australia had increased from A$3.50 in 2014 to A$4.10 – a 17% spike in just three years. 

However, in the past four or five years, some changes have been even more dramatic. When ONA Coffee Sydney first launched their “reserve” menu of frozen coffees in 2018, many people were shocked at the presence of a A$16 filter coffee on the board. 

Just three years later, a Melbourne coffee shop has made headlines for serving a A$200 cup of coffee.

However, Hany says that the increases and greater variation in pricing has by no means been negatively received. 

“Consumers have become more willing to spend more on higher-end coffees and coffee experiences, like frozen and ‘reserve coffee’ menus,” he explains.

“I believe the industry is headed in the right direction, [and] I hope to see the average price of coffee rise in Australia in the future, to benefit all parts of the supply chain.”

Oliver notes that this hasn’t just been down to increased quality, however; it can also be attributed to a more educated average consumer.

“Customers are much more educated [than before],” he says. “They are curious about origins, and generally know if they prefer fruity, nutty or chocolaty flavour profiles, for instance.

“Many also know about origins and their flavour profiles, and are willing to pay higher prices for better quality espresso or beans to take home.”

Embracing new ideas

Despite the fact that Australian coffee culture was born just a few decades ago from existing habits brought over by European migrants, it is now at the forefront of specialty coffee consumption. Today, Australian coffee shops and roasters continue to push boundaries and innovate. 

However, Oliver explains that this relative youth and a lack of any traditional coffee culture is precisely why innovation is so warmly welcomed.

He says: “I think Australian coffee culture is generally more open and excited for new ideas, and happy to trial equipment, methods or ideologies.

“Australian [coffee] culture is less dictated by our maintaining historical ideas or ways of doing things in the wider industry.”

Hany mirrors this, reflecting on the receptive nature of the Australian coffee consumer.

“I see our community as very open-minded people,” he says. “[They are] pushing boundaries and [have a] willingness to adapt in search of a better cup.”

Thanks to its ever-evolving coffee culture and a range of emerging, innovative ways to serve coffee, Australia seems set to maintain its reputation as a leading force in specialty coffee.

However, with the rise of other consuming markets in Asia and the Middle East, and a wider growing obsession with experimental and high-scoring coffees, it could well face strong competition in the not-so-distant future.

Enjoyed this? Then you might like our article on the flat white and how it’s different to a latte.

Perfect Daily Grind

Photo credits: Rowan Marsh-Croft, Jordan Montgomery, Samuel Yap

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For many smallholder coffee producers, their most viable option is to sell the coffee they produce as a commodity product to mills and exporters. In fact, for some producers, this is their only choice. Their coffee will then sold outside of the specialty industry as part of a blend.

In this context, Ever’s success is remarkable. Yet other producers have similar stories to him. For some, participating in specialty coffee awards and auctions has led to their first ever direct trade relationship. For others, they’ve been able to gain recognition for their farm. Here are some of their stories.

Spanish Version: Historias de Productores de Café: Cómo las Subastas Facilitan el Comercio Directo

Natural coffees, bound for Project Origin: Best of El Salvador, dry in the sun. Credit: Project Origin and Tripode Audiovisual

Auctions & Small Producers

Smallholder farmers are often the ones who would benefit the most from auctions, but can struggle to enter them. When Sasa Sestic, 2015 World Barista Champion and Director of ONA Coffee, Australia, founded Project Origin, he wanted to make it easier for them.

Ever Leonel Díaz Pérez became the 2016 Washed category Champion, a testament to the excellent quality of his coffee. Yet he only has a one-manzana farm. Less than two acres in size, Finca Milaydi only produces 6–15 bags of coffee every year. Many smallholder producers like him are unable to participate in most coffee auctions and programs, due to the minimum lot size requirements for sampling and profiling.

In the past, Ever sold his coffee to other producers, who would sometimes combine it with their lots for entry in competition. He’s often seen these blends win, achieving prices significantly higher than his US $2/lb. Project Origin 2016 was the first auction his coffee had ever been entered on its own – and under his name.

Sasa Sestic grades coffees at a Project Origin auction. Credit: Project Origin and Tripode Audiovisual

International Recognition, Higher Prices

Yet it’s not just small and relatively unknown producers who benefit from these events. Raul Rivera’s coffee is relatively well known, selling for US $4-5/lb. But when he competed in Project Origin last year, his Honey Process Pacamara sold for US $10.30/lb – a dramatic increase.

What’s more, even those who don’t participate may benefit from their country’s representation among the international coffee community. Gilberto Baraona of Finca Los Pirineos says, “Due to la roya (coffee leaf rust) in the past few years, which has resulted in very low coffee yield and production, a lot of buyers have looked elsewhere.” This year, he is joining the Project Origin: Best of El Salvador team as a Coordinator, explaining that the auction “helps [El Salvador] stay on the radar for quality in the specialty coffee sector.”

Carolina Padilla, a Co-coordinator, gives a similar opinion. “Bringing in new buyers and new people interested in our coffee also aids our country,” she says. “It helps raise the bar for quality processing for producers and paying them a higher price gives an incentive to keep striving for better [quality]. It’s amazing to have a closer experience with buyers about what consumers are looking for and where the market is shifting.”

She also believes that auctions with smaller producers brings more variance and excitement, which challenges coffee farmers to experiment and push boundaries. “You see it in the winning coffees: new varieties, new processes, more participants. At the end of the day, it helps everyone.”

During the live online auction, buyers from all over world bid on winning coffees. Credit: Project Origin and Tripode Audiovisual

SEE ALSO: Producer Interview: Direct Trade Is a Two-Way Street

Facilitating Direct Trade

What’s more, many attendees at the auctions – most of whom are importers and roasters – are given the opportunity to create long and lasting relationships with producers.

El Optimismo is another Salvadoran farm that competed in 2016. Back then, they had never had a direct trade relationship. However, as a result of the auction, they have been connected with a buyer in Australia. This provides them security: they know they will have a buyer for next year’s crop. It also ensures they can receive consistent feedback, with advice on how their product tastes when the buyer receives it, and so can make improvements.

Lucia Ortiz, co-producer of the La Avila farm in El Salvador, tells me that she believes direct trade is integral to the specialty coffee process: “Direct trade, for me, is the direct relationship between the roasters or importers and the farmer, [with them] being the ones that discuss quality, prices, and day-to-day work at the farm.”

What’s more, direct trade doesn’t just have to be about buying and selling coffee. Lucia continues, “I am a direct trade farmer, which means I have the direct relationship with the roaster or importer… We encourage buyers to be part of our community. For example, some buyers help us support a clinic we have at the farm. By donating money or medicine, they aid us in helping the communities that are around the farm, as well as our workers.”

Producers, roasters, and importers at Project Origin Best of El Salvador 2016. Credit: Project Origin and Tripode Audiovisual

In 2017, Project Origin will return with the Best of El Salvador auction, April 24–30; the inaugural Best of Nicaragua auction, June 5–10; and the Best of Honduras: Late Harvest auction, July 24–30, which celebrates late-ripening coffees that are usually overlooked by buyers. The events will feature farm visits, tastings, and workshops, as well as the live online auction.

“When looking to establish a relationship, we look for not only quality coffee. We will only work with [people] that have a positive attitude towards sustainability and continue development,” says Sasa Sestic.

For more information on the 2017 auctions in El Salvador, Nicaragua and Honduras, including on how to become a judge or receive samples, please email habib@projectorigin.com.au.

Please note: Project Origin is a sponsor of Perfect Daily Grind. They have submitted this article according to our editorial policies and have had no further sway over the final copy than any of our other writers.

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