Roasters press retailers for price hikes as coffee costs continue to spike
Coffee prices in the US are expected to jump further in the coming weeks after roasters hold talks with retailers about passing on costs.
Some leading coffee companies, including Lavazza, Illy, Nestlé, and JDE Peet’s, which makes Douwe Egberts, have reportedly been in discussions with various supermarkets as the coffee crisis deepens.
The talks come as Arabic coffee prices have almost doubled in the last 12 months, and the average price of ground roast coffee reaches US$7.25 a pound.
In recent weeks, there have been reports of supermarkets running out of coffee brands as consumers buy up products before further price increases hit.
Recently, coffee prices have been hit by a myriad of factors. Some of the leading coffee-growing regions have experienced extreme weather events that have disrupted crops, and tariff disputes have also impacted coffee prices.
In addition, additional shipping times through the Suez Canal have also caused companies to increase costs.
Lavazza’s chairman predicted last summer that coffee prices were likely to remain “very high” until at least the middle of next year (2025).
Hope on the horizon
Despite the bleak expectations for further coffee price increases, there are some positive forecasts, according to the US Department of Agriculture’s (USDA) latest coffee market report.
World coffee production for 2024/25 is forecast to be 6.9 million bags higher than the previous year, at 174.9 million, due primarily to rebounding output in Vietnam and Indonesia.
“World exports are forecast to be modestly higher as gains in Vietnam and Indonesia offset reduced shipments from Brazil. Global consumption is expected to rise 5.1 million bags to 168.1 million, with the largest gains in the European Union, the US, and China,” it says.
Vietnam production is forecast to recover from 2.6 million bags to 30.1 million but remain below the 2021/22 record crop. The USDA says the beginning of the rainy season was dry and followed by below-average rains and temperatures in many of the major growing areas.
“Whereas similar conditions lowered yields and output the previous two harvests, growers this year responded to higher coffee prices by picking as much as possible rather than omitting smaller, less profitable cherries. Bean exports are forecast to rebound 1.8 million bags to 24.4 million on higher available supplies.”
Arabica production in Colombia, Central America, Honduras, and Mexico is also predicted to rise during the 2025 season, and rebounds are also expected in Indonesia, the EU, and the US.
The USDA also flags China’s coffee consumption surging by almost 150% in the last ten years. Tea remains China’s primary beverage, but the appetite for coffee is increasing, especially with younger professionals in urban areas who increasingly purchase coffee away from home.
