Brewed Awakening
More of your paycheck is about to drip into your morning mug.
If the best part of waking up is Folgers in your cup, you may now be able to better justify swapping that morning grocery-brand grind for a latte by your local barista. To put it bluntly: Coffee is facing a crisis and the economic grind is real—especially for base-level brands. So, if you’re grabbing a bag off the grocery shelf, the bitter reality is coffee could be the new egg.
It all begins with the market—and, no, this isn’t about tariffs (yet). The C market price—think kind of like the stock market—for commodity coffee (read: Folgers, Dunkin’, Starbucks and the like) has more than doubled, skyrocketing to as high as $4.40 per pound, up from a previous low of ~$1.44 and sitting around $3.62 at press time. While that price hike is more jolting than the quad-shot you order on repeat, it’s the instability in the supply chain that’s fueling the surge.
Thanks to climate change, waning crops and trade issues, says Giorgios Epicurean Market opening Coffee Team Lead Eric Turner, import prices are soaring—and nearly everyone in the coffee supply chain will be feeling the pressure, from roasters to everyday drinkers.
“It’s a boiling mess” chimes Black & White Coffee Roasters Director Kyle Ramage, an industry expert in his own right. The mass market is “where it’s really biting people right now,” adds the longtime brewer and a 2017 U.S. Coffee Champion, noting players like Folgers, Maxwell House and Starbucks are seeing astronomical price jumps of 300 to 400%—thus shortening the gap between those brews and premium barista blends.
Despite global pressures, when those big-brand commodity coffees spiked to a historic high, green coffees (coffee that’s imported before it’s roasted) only inched up slightly. “So, the market just kind of compressed,” he says. Adds Jubala Director of Operations Shane Hess, “It’s forcing people like your Folgers, and to some extent Starbucks, who now have a quality problem, to beat our competitive prices—and they can’t compare to what we’re able to do.” Basically, the grocery grinds just jumped to where the local cafe blends have always been.
The difference on which hits your wallet the hardest rests in the fact that premium roasters are better positioned to weather the brewing storm. “Some of the bigger boutique brands have already been raising their prices for the past year or two—I’ve paid $30 for a 4-oz. bag of Monks,” says Turner. Even market heavyweights like Joe Van Gogh and Counter Culture—the latter of which roasts ~4 million pounds per year—have seen price bumps of as much as $1.50 to $3.50 per pound.
The issue comes down to panic buying versus timing for roasters who lock in prices years in advance to avoid market volatility. That said, adding insult to injury, even some producers who have inked contracts are eyeing fivefold profits elsewhere and backing out—and there’s not a lot of recourse if they turn around and sell to someone in, say, Brazil or Colombia with totally different laws from the U.S., explains Ramage, since you can’t really chase them through international courts.
But navigating that market movement, he maintains, is what’s behind the supply and demand shift, “causing a bunch of roasters—meaning the whole market, from Starbucks to us—to not contract forward because the prices were high and, historically, it should come down later. We thought, ‘We’ll just wait.’” And, as you’d have it, he adds, unbeknownst to everyone, everyone waited—making for a super-long supply and, subsequently, super-high demand.
For its part, though, Black & White has been able to remain somewhat insulated by riding the market. “Four dollars is about what we were already paying on average for coffee,” he says, noting they’re still seeing a 75-cent to dollar uptick per pound. “We started noticing prices were creeping up around the middle of last year and already raised our prices by about a dollar, so they shouldn’t change much again.”
When looking at navigating a price increase like this, says Hess, who has also put NC on the world map via the U.S. Barista Championship, it’s a constant problem. “From our vantage point, prices fluctuate all the time,” he notes, nodding to this year’s now-dropping egg prices after what was their fourth go-round with the bird flu. “We don’t want to gouge our customers because we are being gouged by the industry. The hallmark of Jubala is to move very methodically and intentionally.”
For its part, Jubala has been able to pivot by running through contracts inked pre-inflation without any hiccups—and relying on its robust food program. But the fear is green coffee pricing once tariffs hit or climate change continues, laments Hess.
While local latte lovers look to be dodging a bullet—for now—ultimately, no one is truly safe. “When there’s instability, there’s more risk,” sums Ramage. “And when there’s more risk, inherently, there’s going to be more cost. So how is this going to affect a cup of coffee to the normal consumer, right? Whether they’re specialty sippers or Folgers drinkers or whatever, everyone’s prices are gonna go up. They are 100% going to go up.” The question is how much?
As the summer progresses, the pressure will likely intensify—and that budget coffee you’re drinking today may cost twice as much by the end of the year, meaning the cheapest options could, ironically, become a rare luxury. What it boils down to is a pretty bitter sip to swallow: The coffee world is in crisis, and as much as we’d like to hope for a reversal, we’re likely brewing up an expensive storm that’s only going to get worse before it gets better.
