Coffee remains a beloved part of daily life, but soaring prices are reshaping consumer behavior. The days of discarding leftover coffee in the thermos are dwindling as households and the industry alike acknowledge the impact of skyrocketing costs. Traditional coffee prices in retail have surged by 54% since January, forcing many consumers to opt for cheaper brands, and reheated coffee has become a practical alternative for avoiding waste.
The steep price hikes stem from uncertainty over global coffee supply in 2025, which has driven Arabica prices up by over 70% on the New York Stock Exchange. According to the Brazilian Coffee Industry Association (ABIC), this trend is expected to persist, with retail prices set to increase by an additional 15% before Christmas.
“Previously, when coffee in a one-liter thermos went cold, people would often discard it and brew a fresh batch,” explains Celírio Inácio, executive director of ABIC. “Now, with prices this high, consumers are becoming more mindful—not just about avoiding waste but also in selecting the varieties they purchase.”
Edgard Bressani, a coffee trader and expert, emphasizes the impact of these hikes on lower-income consumers. “People will have to make difficult choices and turn to cheaper alternatives. Lower-quality coffee is beginning to enter the market as brands adjust to meet these needs,” he says.
Major players in Brazil’s coffee market are preparing for additional price increases. 3Corações, the market leader, announced a 21% price hike on retail deliveries set to start on January 1, 2025. Similarly, JDE—owner of brands like Pilão and Café do Ponto—has informed customers of a 20% price increase this month across various categories, including ground coffee, beans, capsules, soluble coffee, and espresso, with another 20% adjustment planned for January.
JDE attributes the rise to climatic challenges faced by key producing regions like Brazil and Vietnam. When contacted, the company declined to comment on pricing policies.
The surge in coffee prices on international markets is fueled by unfavorable weather affecting major coffee-growing regions. Brazil and Colombia, the largest Arabica producers, along with Vietnam, the leading Robusta exporter, have suffered from drought and delayed rainfall. While October rains spurred good flowering, prior drought has caused significant stress, leading to foliage loss and reducing the conversion of flowers to fruit, thereby impacting production potential.
Marcus Magalhães of MM Cafés brokerage notes, “There is no surplus of coffee in the world to support a downward trend. The end consumer must adapt because this new normal is here to stay. If the industry doesn’t pass on the price increases, it risks strangling itself, as raw material costs will continue to rise.”
Magalhães highlights the stark price increases over the past year. For example, in 2023, bags of Conilon coffee traded at around R$800, and Arabica fetched R$900. Today, those prices have more than doubled to R$1,800 and R$2,100 per bag, respectively.
Brands are now relying on existing stocks and gradually transferring higher costs to consumers to avoid abrupt market shocks. Melitta, for example, adjusted prices for its toasted and ground products, including the Bom Jesus and Barão brands, by 25% earlier this month. When contacted, the company declined to comment on its commercial strategies.
ABIC’s monitoring of retail chains shows a sharp rise in coffee prices throughout 2024. From January to May, the average price of one kilogram of traditional coffee was R$36.15 but climbed steeply past R$40 during climate-related disruptions, reaching R$49.50 by November. Prices have now surpassed R$54, marking a 54% increase from January’s average.
Despite efforts such as “repurchasing” lower-grade beans to build stock, the volume available is insufficient for 12-month security, warns ABIC's Celírio. This shift is noteworthy; traditional coffee, once not a major household budget factor, has now become a growing concern. “The key question is how much higher prices will climb. If prices rise too steeply and buyers pull back, we could see relative stabilization,” he suggests.
Experts agree on one thing: returning to 2023 price levels seems unlikely. “Currently, bags with production costs of R$900 yield 100% to 150% profit for producers, which rarely occurs across other sectors. While this allows growers to capitalize and build reserves, such high margins' sustainability remains questionable,” says Bressani.
Roasters and retailers also face mounting pressure, concerned about current stock levels not meeting processing demands. Analysts predict coffee prices may continue to rise or stabilize at new higher levels on the New York Stock Exchange, projected between $3.20 and $3.40 per pound.
These elevated prices are reverberations throughout the supply chain. Vicente Zotti, analyst and partner at Pine Agronegócios, emphasizes the pivotal consumer behavior, “Now is the moment of truth for coffee. With 500-gram packets costing R$37 to R$40, will consumers continue to buy the product?”
Zotti believes if consumption holds steady, it will pave the way for additional price hikes globally. With diversifying trends pressuring markets and consumers alike, how coffee prices will evolve remains uncertain, but one thing is clear: the caffeine-infused staple is reshaping financial landscapes.
