COFFEE on American supermarket shelves is becoming increasingly less affordable for the average consumer.
Ground coffee prices in US supermarkets surged almost 21% year-on-year in August, hitting a record $8.87 a pound, according to the Bureau of Labor Statistics. That marks the steepest rise since the 1990s.
High tariffs on imports from Brazil and Vietnam – the world’s two biggest suppliers – have collided with weather-related crop shocks and supply-chain disruptions. Consumers are feeling the pinch.
Coffee is not alone. Grocery prices overall have risen nearly 30% in the past five years, with meat, eggs and dairy also climbing steeply. But coffee is emblematic: unlike beef or pork, the US produces negligible amounts domestically, making tariffs a tax on every coffee break.
For many households, the price increases come as a blow: higher costs just as other food bills are already stretched thin. Some consumers are rationing, others are buying in bulk or turning to caffeine tablets. Reddit forums are rife with talk of “getting used to rationing.”
“More bulk buying in anticipation of higher prices is one of the options that consumers have,” says Thijs Geijer, Economist at ING Research. “But, suppose you go to the store tomorrow to buy in bulk , then you spend more money now to save money in the long run. If you want to save money now, then you’ll trade down to private label, only buy in promotion, or switch to a cheaper supermarket.”
“However, there are two things that reduce the impact of any price-led adjustment. First, elasticity for in-home coffee consumption is relatively low so even with higher prices, most consumers stick to similar habits. And second, the underlying long-term trend is towards more expensive single-serve pods or capsules. Retailers can also pre-buy more inventories to delay the need for price increases on shelves.”
Supermarkets are adjusting too. The giant Kroger chain says shoppers are making smaller, more frequent trips, turning to coupons, and trading down to private-label coffee.
“First, we have to recognize that ‘coffee’ isn’t one single market,” says Martin Mayorga, Founder and CEO of Mayorga Coffee. “It spans from cheap, commodity-grade products to over-hyped hyper-specialty and lots in between.”
“When prices spike, consumers naturally migrate downward in the spectrum to protect their household budgets. At Mayorga, we see this manifest as more demand for bulk size, grocery value formats, and online discount channels. However, we have also absorbed a very high percentage of the increases, and have not raised prices as aggressively as our competitors who seek massive margins. What’s most important is that people still want great coffee they can trust.”
Shrinkflation compounds the pain: bags that once weighed 16 ounces now arrive on shelves at 10.5 ounces. In a category defined by habit, such changes risk breaking routines – and perhaps, as some analysts warn, losing a generation of coffee drinkers altogether.
The supply squeeze
The squeeze at the checkout counter is rooted in deeper supply-side turmoil. Coffee futures in New York have approached all-time highs this autumn, as hedge funds pile into bets and exporters scramble to unwind positions to avoid costly margin calls.
Tomas Araujo of StoneX told Reuters that most of this recent rally is tariff-driven, exacerbated by supply chain disruptions. Brazil’s erratic weather has cut output, while labour shortages and logistics strains amplify volatility.
“Yes, prices rise, but so do wages and costs across the supply chain,” says Martin. “Producers finally have a chance at fairer returns, and that matters for the overall viability of the industry.”
Tariffs remain a sharp distortion. By imposing levies on products America does not grow at scale – coffee, cocoa, tea – the White House has turned a critical import into a bargaining chip. The National Coffee Association has lobbied for exemptions, arguing that coffee is an “unavailable natural resource” vital to both consumers and the wider economy.
Some progress was made with a recent executive order hinting at possible relief. But for now, roasters and retailers must pay more for coffee, and much of that cost is passed to shoppers.
For roasters, high prices create dilemmas. Reformulating blends – substituting lower-cost robusta for arabica, or introducing cheaper origins – risks alienating loyal customers.
“Reformulating blends to ‘engineer value’ is, in my view, brand suicide,” says Martin. “It erodes trust and it betrays both consumers and producers. The better approach – and what we’ve done at Mayorga – is to embrace transparency, manage costs intelligently, and communicate clearly with consumers.”
“Coffee is about culture, community, farmers’ livelihoods. If a company sacrifices flavour integrity for short-term savings, they’ll lose in the long run. Brands that stay grounded in quality, fairness, and consistency will continue to thrive, even in volatile markets. Those of us who are willing to operate at very low margins will continue to get the lion’s share of the growth.”
Dilution is another route: iced “coffee buckets” and milk-heavy lattes stretch beans with syrups, ice and dairy. Such tactics preserve the illusion of abundance while discreetly reducing the coffee content.
Yet if younger consumers grow used to sugar-forward, diluted drinks, the very idea of coffee as a distinctive product could erode. The paradox is striking: the more scarce and expensive coffee becomes, the less actual coffee may end up in cups.
Ground coffee prices in US supermarkets surged almost 21% year-on-year in August, hitting a record $8.87 a pound, according to the Bureau of Labor Statistics. That marks the steepest rise since the 1990s.
High tariffs on imports from Brazil and Vietnam – the world’s two biggest suppliers – have collided with weather-related crop shocks and supply-chain disruptions. Consumers are feeling the pinch.
Coffee is not alone. Grocery prices overall have risen nearly 30% in the past five years, with meat, eggs and dairy also climbing steeply. But coffee is emblematic: unlike beef or pork, the US produces negligible amounts domestically, making tariffs a tax on every coffee break.
For many households, the price increases come as a blow: higher costs just as other food bills are already stretched thin. Some consumers are rationing, others are buying in bulk or turning to caffeine tablets. Reddit forums are rife with talk of “getting used to rationing.”
“More bulk buying in anticipation of higher prices is one of the options that consumers have,” says Thijs Geijer, Economist at ING Research. “But, suppose you go to the store tomorrow to buy in bulk , then you spend more money now to save money in the long run. If you want to save money now, then you’ll trade down to private label, only buy in promotion, or switch to a cheaper supermarket.”
“However, there are two things that reduce the impact of any price-led adjustment. First, elasticity for in-home coffee consumption is relatively low so even with higher prices, most consumers stick to similar habits. And second, the underlying long-term trend is towards more expensive single-serve pods or capsules. Retailers can also pre-buy more inventories to delay the need for price increases on shelves.”
Supermarkets are adjusting too. The giant Kroger chain says shoppers are making smaller, more frequent trips, turning to coupons, and trading down to private-label coffee.
“First, we have to recognize that ‘coffee’ isn’t one single market,” says Martin Mayorga, Founder and CEO of Mayorga Coffee. “It spans from cheap, commodity-grade products to over-hyped hyper-specialty and lots in between.”
“When prices spike, consumers naturally migrate downward in the spectrum to protect their household budgets. At Mayorga, we see this manifest as more demand for bulk size, grocery value formats, and online discount channels. However, we have also absorbed a very high percentage of the increases, and have not raised prices as aggressively as our competitors who seek massive margins. What’s most important is that people still want great coffee they can trust.”
Shrinkflation compounds the pain: bags that once weighed 16 ounces now arrive on shelves at 10.5 ounces. In a category defined by habit, such changes risk breaking routines – and perhaps, as some analysts warn, losing a generation of coffee drinkers altogether.
The supply squeeze
The squeeze at the checkout counter is rooted in deeper supply-side turmoil. Coffee futures in New York have approached all-time highs this autumn, as hedge funds pile into bets and exporters scramble to unwind positions to avoid costly margin calls.
Tomas Araujo of StoneX told Reuters that most of this recent rally is tariff-driven, exacerbated by supply chain disruptions. Brazil’s erratic weather has cut output, while labour shortages and logistics strains amplify volatility.
“Yes, prices rise, but so do wages and costs across the supply chain,” says Martin. “Producers finally have a chance at fairer returns, and that matters for the overall viability of the industry.”
Tariffs remain a sharp distortion. By imposing levies on products America does not grow at scale – coffee, cocoa, tea – the White House has turned a critical import into a bargaining chip. The National Coffee Association has lobbied for exemptions, arguing that coffee is an “unavailable natural resource” vital to both consumers and the wider economy.
Some progress was made with a recent executive order hinting at possible relief. But for now, roasters and retailers must pay more for coffee, and much of that cost is passed to shoppers.
For roasters, high prices create dilemmas. Reformulating blends – substituting lower-cost robusta for arabica, or introducing cheaper origins – risks alienating loyal customers.
“Reformulating blends to ‘engineer value’ is, in my view, brand suicide,” says Martin. “It erodes trust and it betrays both consumers and producers. The better approach – and what we’ve done at Mayorga – is to embrace transparency, manage costs intelligently, and communicate clearly with consumers.”
“Coffee is about culture, community, farmers’ livelihoods. If a company sacrifices flavour integrity for short-term savings, they’ll lose in the long run. Brands that stay grounded in quality, fairness, and consistency will continue to thrive, even in volatile markets. Those of us who are willing to operate at very low margins will continue to get the lion’s share of the growth.”
Dilution is another route: iced “coffee buckets” and milk-heavy lattes stretch beans with syrups, ice and dairy. Such tactics preserve the illusion of abundance while discreetly reducing the coffee content.
Yet if younger consumers grow used to sugar-forward, diluted drinks, the very idea of coffee as a distinctive product could erode. The paradox is striking: the more scarce and expensive coffee becomes, the less actual coffee may end up in cups.
