In 2005, the second year Starbucks offered their now-iconic pumpkin spice latte across the United States, it cost $3.35 for a Grande. Today, the same PSL will run you at least $6.50, an increase of 94%.
While it would be easy to blame the high-end coffee chains for the increase, inflation across the board has only risen 62% over the past 20 years, but that’s only part of the picture. Yes, Starbucks, Dunkin’, Caribou Coffee and even Tim Hortons charge a higher price for convenience and atmosphere. But coffee prices in general this year are the highest they’ve been since 1977. And here in the United States, imported coffee is now subject to tariffs running anywhere from a 10% to a 50% markup. And 99% of the java we drink in the U.S. is imported.
Ryan Fritzky, the co-founder of Bean Box, the largest online specialty coffee marketplace in the U.S., shares that the volume of price increases is unprecedented in his company’s 11 years in operation. “The primary factors driving price increases are green coffee bean prices due to climate-related impacts at origin, i.e., lower yields, tariffs and minimum wage increases in urban markets.”
Daily ritual
For many, their cup of joe is an unmissable morning convention, even if they do drink less than their grandparents and great-grandparents in the ‘40s and ‘50s. Sanka and instant coffee may have given way to Keurigs, Nespresso and latte breves at the local drive-thru, but bean-based caffeine is still very much in demand.
Kyle Newkirk, the chief commercial officer at Westrock Coffee, points out, “Recent data shows café traffic dipping, but instead of skipping coffee altogether, many consumers are simply trading down – choosing simpler, more budget-friendly options when they visit cafes. The good news is that coffee meets every budget, whether in a cafe or at home.”
Which factors drive the biggest increases?
“Beyond tariffs and labor, the Brazilian drought has been a big driver of coffee inflation over the past year,” explains Theo Chan, managing editor of Coffee Roast. “Brazil supplies roughly a third of the world’s coffee, so weather shocks there ripple through global commodity markets quickly, and they had a very hot/dry season where coffee died on the plant … roasters faced dramatically higher green coffee costs almost overnight.”
Usha Haley, Barton distinguished chair in international business at Wichita State University, notes, “While coffee beans and dairy trade globally, a large share of the price for lattes comes from local costs such as wages, rents and utilities, all of which have been creeping up. So, cafes, many of them small businesses, also confront structural inflation at home, and pass on these increased costs to customers as well.”
Devocion sells the freshest coffee in the U.S., going from origin to cup in as little as 10 days. Steven Sutton, their founder and CEO, adds, “Everything hits us one way or the other. Either hitting the product costs of goods sold directly, or the cost of living of our employees, which in turn needs better wages and better benefits. All these factors are factored into the final coffee prices.”
Building loyalty vs. skimpflation
While some chain coffee providers might turn to automation or cut corners on quality, many smaller cafes say it’s not worth it. They focus instead on building customer confidence.
“We believe there is great value in a cup of specialty coffee. A moment of quiet reflection or conversation with a group of friends is worth paying for,” explains Heather Perry, CEO of Klatch Coffee and former president of the Specialty Coffee Association. “… the ultimate price on the menu board is never finished, and it’s especially critical given the current business climate. It’s a constant effort and area of focus to always make sure we’re delivering great coffee and great value, even when we must ultimately raise prices.”
“Nobody cheers when they see a $7 latte,” says Drew Pond, director of development and co-owner of Midwest coffee roaster Stone Creek Coffee. “The difference is, our customers know what they’re paying for: A Certified B Corp that sources ethically, pays people fairly and delivers a great, holistic hospitality experience.”
Lindsey Sozio, founder of renowned Denver coffee shop Lavender Coffee Boutique, explains her strategy: “We focus on quality and consistency. We work extremely hard to make sure every single drink is of the finest quality. We believe our customers feel that intention and the value we provide, which is why they’ve stayed so loyal through these small price increases.”
For Leo Yuffa, owner of Dazbog Coffee, it comes down to transparency. “When we explain where their money is going and that the price increase is necessary to maintain the quality of the product and service, most agree that it is justified.”
Digging the home brew
As an alternative to the escalating prices at major chains, a lot of consumers simply avoid the drive-thru, seeking out recipes for their favorite coffee drinks. For example, bulletproof coffee is faster and easier to prepare at home.
“I used to treat myself to a coffee a few times a week, but due to the rising food costs overall and coffee prices in particular, I’ve taken to making all my favourite syrups at home, shares Ksenia Prints with My Mocktail Forest. “I invested in a good coffee machine and now, my morning latte feels like it came from a fancy shop!”
“I’ve had to scale back on my once-weekly latte fix. The good news, though, is that I have since learned how to make delicious lattes at home with just a few, healthier ingredients. Not only does this save me a lot of money, but I love being able to adjust the flavor a bit more to my preferences,” adds Shelby from Fit as a Mama Bear.
“Buying specialty coffees out has gotten so expensive that I’ve started making my own versions at home, adding cocoa powder and other flavorings and steaming the milk in a plug-in frother,” explains Robin Donovan, founder of the food blog All Ways Delicious. “I miss getting a fancy drink at my neighborhood cafe a few times a week, but the savings are significant enough to keep me from caving.”
“In my world, coffee is a necessity. Full stop,” says Sage Scott of Sage Alpha Gal. “But long gone are the days of treating myself to a flavored latte at a cafe. I buy my beans in bulk at Costco and store them in the freezer to keep them fresh for as long as possible. I learned how to make a few of my favorite syrups (hello, honey lavender), and I’m now the proud owner of a 4-in-1 frother. Now I can channel my inner barista and whip up specialty lattes and iced drinks at home, and even top them with cold foam when I want!”
Java jolt
Whether you’re jonesing for a PSL, waking up to the aroma of your automatic drip or preparing your pistachio latte, you’re going to be paying the price for your caffeine fix. Coffee prices are up across the board, thanks to environmental issues, government tariffs and general inflation. The good news is, with a little creativity, you don’t have to pay chain prices to get the flavors you love.
Bella Bucchiotti is a freelance writer with a passion for adventure, delicious recipes and authentic storytelling. Through xoxoBella and social media, she shares vibrant travel experiences, mouthwatering dishes and everyday moments that inspire connection.
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