Why is My Coffee So Expensive?

(SPL Coffee in LA, CA)

Happy Sunday 16ozDays family. We hope you’ve had a relaxing weekend; here in Minneapolis the weather has been absolutely wild. Thunderstorms, hail, wind, and sun?? But what did we expect, this is Minnesota after all. This week, we’ve had something bigger on our minds: money. We, along with the rest of the world, have been noticing coffee prices skyrocket and have been wondering why. We’re digging into the coffee industry and why the market is so volatile and unpredictable; affecting how much we pay for our lattes everyday. However, we have laid it out in a totally down to earth, coffee addict manner. I promise you no “business bros” here. Without further adieu, let’s dig in.

(Coffee Beans)

The History of Coffee

To start, let’s take a look back in time. As mentioned in “Coffee Price Inflation since 1967” by In Dollars, the price of coffee today is over 700% more then in 1967, with an average inflation rate of almost 4% a year. Comparatively this is massive. For reference, the average inflation rate in the United States is well under 3%. So, why has coffee been on such a historical rise?

(Customers at Ninas Coffee, St.Paul)

Our Role

To answer that question, you need to look at yourself, coffee lover. The oldest and most predominant factor historically has been demand. Consumers, like you and me, have wanted more and more coffee, and as the drink grew more popular, farmers could charge more for it; the two fed each other. 

(Young coffee plant)

Environmental Factors

Secondly, there’s a very important biological aspect of coffee that needs to be remembered. Bean crops are highly influenced by weather. Coffea plants, which grow coffee cherries, are not particularly resilient and the environment they are grown in can be unpredictable, susceptible to many kinds of natural disasters. Drought or flood, both conditions can wipe out entire harvests.

Now let’s apply the first point back into this new equation. Not only is there an absolutely astronomical demand for coffee which already makes the beans more valuable, now you add in unpredictable factors. If one crop is ruined, farmers need to make more off of their remaining crop to sustain their farms, therefore they will need to charge more for raw beans. This only adds to the already upward spiraling pricing trends.

(Cranes at a shipping port unloading cargo)

Supply Chain

Now, by no means does this mean coffee farmers are getting rich off of our addiction. Let’s remember we live in America, a capitalist society, and we too are much to blame. Coming into the 21st century there are many added concerns. Coffee beans need to be transported to be roasted, sold, and in the end, consumed by us, so transportation becomes a huge factor. Because of the sheer distance between us and coffee farms, we have to rely on cargo ships to transport the coffee to us. This opens up a whole new world of issues: supply chain issues, port issues, labor issues…the list goes on and on. Now, let’s mix in the COVID-19 pandemic which the industry is still recovering from. 

(Affogato from Yellowbird Coffee Bar)

What this Means for Us

According to an article by CNN, “Inflation is Coming for Your Next Cup of Coffee”, the pandemic has not dented the demand for coffee a bit. With demands skyrocketing and shutdowns happening around the world, the supply chain that is in charge of transporting raw coffee beans from farms to us completely stops and that backlog is just starting to hit us now. With there being shortages here in the USA, everyone has had to raise prices: suppliers raise their prices, so buyers raise their prices, so we pay higher prices for our lattes. It’s a ripple effect. 

(Brazilian landscape)

Natural Disasters

Looking at the most recent activities in the coffee industry and what has caused our most recent surge of over 80%, it can mainly be tied back to weather conditions. According to CBS, Brazil, a major coffee exporter, has seen some of the worst droughts of the century. Around the world, climate change and extreme weather has been affecting coffee production irreparably.The future of coffee looks unknown, and the best we can do is try to stay aware.

(Third Space Cafe, Uptown, Minneapolis)

Our Responsibility

As always, we urge you to use your power as a consumer to do good. Every dollar we spend matters. Now, more than ever as prices skyrocket, it’s so important to support the small shops around you who can’t burden these costs as easily as a Starbucks or Caribou. Skip the frappuccino and check out the local roastery down the street.

(Pillar, Forum Cafe, Minneapolis)

We hope you’ve found this post both informative and understandable. Inflation is weird. For more information on how climate change is altering the world of coffee, check out our post, Beans for thought: Coffee and Sustainability. For some great shops to support check out our recent post, 9 Women-Owned Cafes in the Twin Cities. We hope you have a great week 16ozDays family and as always, don’t forget to tip your barista.