Why Is Coffee So Expensive? (2024)

In today’s world, coffee is an indispensable morning ritual for millions. Still, with today’s coffee prices soaring, as a coffee lover, you may ponder: “Why is coffee so expensive?”

In this blog post, we’ll unravel the mystery behind the rising costs of coffee.

I’ll examine the various economic and environmental factors influencing coffee prices. These include the effects of climate change on coffee farmers and the cost and quality controls of coffee bean production.

I’ll also look at the cost of labor, the price of logistics and shipping costs. And examine the role fair trade practices play in shaping coffee farming and the coffee industry.

Overview: Is Coffee Getting More Expensive?

Coffee prices are rising and there are various influencing factors behind this trend. Depending on how and where you source and buy your coffee beans, the price will vary quite substantially.

The wholesale prices of higher quality coffee will vary in price compared to lower quality coffee. For example, Arabica varieties command much higher prices than Robusta varieties.

Also, where you buy your coffee matters. Coffee drinkers pay way more for premium quality coffee or specialty coffee in coffee shops and cafes than in grocery stores.

So, to better understand the question of why coffee is so expensive, we first need to look at the processes of coffee farming and coffee production. These influence the supply chain of coffee produced, ensuring premium quality coffee beans. They all affect the coffee price, resulting in higher prices for your daily cup of joe.

Why Is Coffee So Expensive? 6 Reasons

Let’s now look at the many factors driving up prices in the coffee industry:

Labor Costs

Growing coffee plants well requires a lot of work. In fact, the process is a labor of love for coffee producers. In most cases, planting, fertilizing, weeding and strip harvesting of coffee beans all involve manual labor.

To complicate matters, coffee cherries ripen at different rates, necessitating selective harvesting. This is not cost effective, leading to increased labor costs.

Another factor to consider when asking, “Why is coffee so expensive?” is that most coffee farming occurs in the tropics. This includes developing regions like East Africa, Central America, South America and Asia. Coffee farmers and cooperatives in these countries often bear most coffee costs, including labor. They receive few government subsidies, leading to rising business costs, among other factors.

Shipping Costs

The coffee supply chain is long. It extends from coffee farms in Africa, Asia and Central and South America to your neighborhood grocery store or coffee shop. After harvesting, coffee beans go through several processes, including washing, drying, quality selection, packing and shipping.

There’s no such thing as free coffee! Most end consumers of coffee are in Western countries, so logistics, labor and shipping costs can be high. What’s more, coffee beans travel through several borders. They must adhere to the rules and tariffs that govern international trade. Ultimately, these factors raise the average price of coffee in grocery stores and coffee shops.

Climate Change

Coffee harvests all around the world are susceptible to climate change. Shifting rainfall patterns, rising temperatures, pests and diseases can all affect cherry output. This, in turn, affects crop yields, leading to scarcity. So, any shortage of coffee raises the average price of coffee beans on the world market.

Increased expenses to ensure a good crop yield leads to a higher quality coffee bean. This will ensure higher coffee prices and long-term sustainability.

Improvements in Quality

You won’t ask, “Why is coffee so expensive?” once you know how much goes into establishing a coffee plantation. Coffee farming is no joke; it requires a significant financial and temporal investment.

For starters, coffee farmers must buy suitable fertilizers and pesticides. What’s more, they must also train their labor force in selective picking and the environmental impacts of coffee farming.

Besides, coffee producers have to wait more than a year to harvest their coffee (it can take three to four years for coffee plants to bear fruit). Also, growing altitude, soil composition and the coffee varietals being grown influence coffee bean quality and yield.

Furthermore, the specialty coffee industry values higher quality beans because they are challenging to produce. Coffee aficionados almost always choose to buy coffee with an excellent flavor profile, no matter the price.

This type of coffee includes Kopi Luwak, Jamaican Blue Mountain, Kona Extra Fancy, El Injerto Peaberry, and Esmeralda Geisha. Some specialty coffees can cost as much as $600 per pound!

Supply and Demand

“Why is coffee so expensive?” To answer this question, you must consider the supply and demand issue. Supply and demand of coffee, like any other traded commodity, is vulnerable to major market movements.

Demand can rise overnight once coffee lovers adopt a new coffee craze. It can also drop just as quickly. Thankfully, most coffee shop trends don’t impact the cost of coffee drinks as long as the supply keeps up with the demand.

Fair Trade and Sustainability Efforts

Nowadays, many coffee consumers consider ethically and sustainably produced coffee a vital part of their buying decision.

Case in point: consider the 2023 BBC exposé by an undercover reporter on James Finlay and Unilever Tea farms in Kenya. On specific tea farms, local supervisors sexually assaulted over 70 women. The ensuing scandal resulted in influential end buyers, including Starbucks, refusing to buy tea from the affected companies.

The coffee industry and other food and drink end consumers demand the same – an ethical product. However, fairtrade programs’ social and ecological effects aren’t cost effective. They need extra investment, which drives up the cost of doing business. This causes the price of your daily cappuccino to soar.

The upside is that encouraging fair trade and environmentally friendly farming and coffee farm processes – despite the increased costs – eventually ensures higher quality and an ethical coffee sector.

How to Save Money on Coffee

If the question, “Why is coffee so expensive?” niggles at you every morning as you enjoy your favorite brew, I have good news! You can still have your daily cup of java and save on cost.

How to achieve this dream scenario? Start by brewing your own coffee at home with the help of a high-quality drip coffee maker, moka pot or espresso machine. Also, don’t buy cheap, mass-market-produced, pre-ground coffee from your grocery store. Instead, purchase whole roasted beans instead and grind them yourself to make just enough coffee for when you need it.

By using a decent burr coffee grinder for your coffee beans, you’ll control the quality of coffee you enjoy while reducing how much you spend.

Don’t get me wrong. I’m not saying you should cut out all your visits to the local coffee shop for those mouth-watering espressos, oat milk lattes and flat whites. We wouldn’t want coffee shops to go out of business, now, would we?

But making coffee at home trumps buying takeaway coffee most of the time. You’ll get to lower the cost of your daily cup and choose the strength, flavor, sweetener and milk you use in your drink. You can also develop a favorite free coffee recipe to suit your tastes. And you’ll get to use that swanky ceramic travel mug well!

Final Thoughts: Why Is Coffee So Expensive?

Various factors go into influencing the price of coffee beans. These include changing climate patterns, environmental factors like increasing temperatures, labor and the supply chain. Fairtrade and sustainability initiatives are other factors that raise prices.

Knowing these underlying causes enables you to promote a more sustainable coffee businesses with every bag of specialty coffee beans you pay for.

So the next time you’re enjoying your cup of morning coffee – whether at home, Starbucks or your favorite neighborhood coffee shop – think about how much went into producing your favorite brew!