Coffee prices are crashing. What it means for your cup of joe
It’s coffee season again, and if you didn’t already know it, prices are skyrocketing as consumers turn to cheaper imported beans and the threat of tariffs puts pressure on domestic producers.
Why is it that so many consumers are taking the plunge from high-quality, organic, fair trade or environmentally conscious coffee into the black market? Because coffee prices are plunging, and the demand for premium coffee is driving the change.
“I am not in the market for a lot of coffee now,” said Alex Vos, owner of Two Hands Coffee in Toronto. “When people ask where I like to drink my coffee and I say Lao, they are curious as to how I got into it. But the market is getting crazy because people don’t want to pay top dollar for quality coffee.”
The price-drop phenomenon is nothing new: as consumers turn to lower-priced imported coffee, local producers are struggling to make ends meet. In fact, the price-drop is happening every year.
So what is driving this crazy price-drop phenomenon?
Price competition
To understand the change that’s happening, it helps to understand that prices for a cup of coffee vary from country to country. This causes a “price war” among different coffee outlets. For example, when you order a latte from Starbucks, you’re not simply paying for a single price. You’re paying for the price for their blend, which is priced by their roaster and its supplier. If you were to have ordered the full-fat version instead, you would only pay slightly more for the higher-quality product. This is because Starbucks uses a different blend of beans each month, and those beans are priced higher due to supply and demand.
It’s the same with Starbucks, the parent company of Coffee Bean & Tea Leaf, which has a large roasting facility based in Seattle, Washington. When you order a latte at Starbucks, you’re paying for their blend, and they have a smaller selection at their stores that are closer to your location. Once a year, Starbucks makes different blends based on customer preferences, which is why they price certain stores higher. At other times, the blend changes so that you only pay a slightly higher price, because the customers
