As coffee lovers across the United States prepare their daily brews, they are confronted with rising prices that make their caffeine fix increasingly expensive. According to U.S. government figures, the average price of a pound of ground coffee surged to $9.14 in September 2023, marking a 3% increase from the August average of $8.87. This price represents a staggering 41% increase compared to September 2022.
Since the beginning of this year, coffee prices have been on a sharp upward trajectory. The consumer price index, which encompasses a wider range of coffee products, including instant coffee, has shown a 19% increase from last September, while remaining flat compared to August. The U.S. Labor Department reported that consumer prices for food consumed at home and away from home rose by 3% in September compared to the same month a year prior.
Nikki Bravo, co-owner of Momentum Coffee in Chicago, recently raised prices by approximately 15% for lattes, cappuccinos, and other beverages across her four locations. She cited a 15% increase in the cost of coffee beans compared to the previous year as a key factor in her decision. To manage costs, Bravo has begun roasting more beans in-house, primarily sourcing them from Africa. Additionally, she noted that the prices for cups and sleeves have also risen, compounded by the recent increase in Chicago's minimum wage to $16.60 an hour.
“At some point, we just had to pass it along; we couldn’t continue to absorb the costs,” Bravo stated. The persistent inflation has made consumers more hesitant to indulge in takeout coffee, further impacting local businesses.
According to data from Toast, a restaurant management system, the average price of regular coffee at U.S. restaurants climbed to $3.54 in September, up from $3.45 a year earlier. This trend reflects the broader challenges facing the coffee industry as it grapples with both rising costs and changing consumer behavior.
One significant factor contributing to rising coffee prices is the reliance on imported coffee in the United States. Outside of Hawaii and Puerto Rico, very few regions in the U.S. can produce coffee, leading to the fact that 99% of America’s coffee is imported, as reported by the National Coffee Association. Brazil, which supplies 30% of the U.S. coffee market, has been particularly affected by tariffs imposed during the Trump administration, including a 40% tariff on Brazilian products introduced in July.
Due to these tariffs, Brazilian producers have begun withholding shipments while negotiating with American roasters on who will bear the additional costs, resulting in a reduced supply in the U.S. Similarly, Colombia, which accounts for 20% of the coffee market, faces a 10% tariff, while Vietnam, supplying 8%, has been subject to a 20% tariff since summer.
Poor weather conditions, including heat and drought, have also negatively impacted global coffee production. In 2024, world coffee prices increased by nearly 40%, according to the Food and Agriculture Organization of the United Nations. Recent announcements from the National Oceanic and Atmospheric Administration about La Nina conditions have raised concerns about potential droughts in Brazil, further exacerbating the situation.
In September, a bipartisan group of U.S. House members introduced a bill aimed at repealing all tariffs on coffee. U.S. Rep. Ro Khanna, a Democrat from California, highlighted that the U.S. only produces 1% of the coffee consumed domestically, emphasizing that the tariffs imposed under the previous administration do not make economic sense. Co-sponsor U.S. Rep. Don Bacon, a Republican from Nebraska, noted his interest in the issue sparked by rising grocery store prices and expressed hope that Congress will act to remove these burdensome tariffs.
“I hope the president and Congress see the positive benefit of removing this tariff on everyday Americans,” Bacon stated, reflecting the sentiment that alleviating these tariffs could provide relief to both consumers and local businesses affected by rising coffee prices.
