Global coffee prices rose to record highs this year, sending the cost of cappuccinos and lattes soaring. But a caffeine habit is hard to kick.
So instead of giving up their daily brew, people are choosing cheaper options such as drive-through baristas or whole beans delivered to their door.
An array of data, including visits to US coffee shops and international consumer surveys, point to a growing shift in coffee drinkers’ habits that mirrors how consumers of everything from burritos to beef steaks are adapting to persistent inflation.
It’s a business trend that’s raising competition for some of the biggest chains, but also a cultural shift among cost-conscious members of Gen Z.
“Coffee shops lost a bit of the shine, a bit of momentum as the home market grew,” said James Hoffmann, a coffee connoisseur, YouTube influencer and co-founder of roasters Square Mile Coffee. The cheaper end of the market will keep expanding because “there are cost pressures on people, they need caffeine,” he said at Europe’s coffee-shop summit in Berlin last month.
The price of high-end arabica beans favoured by chains such as Starbucks Corp. has surged over the last year as global supplies, largely from Brazil, were hit by a combination of poor weather and tariffs. Even with the recent pullback after President Donald Trump backed away from some trade levies, New York futures are trading for about $3.60 a pound, more than double the average level seen over the past two decades.
The median price of a regular cup of coffee on menus across the US has risen almost 20% since early 2023, according to data compiled by Toast, which provides point-of-sale systems to restaurants.
US consumers spend more than $100 billion a year on coffee products, according to the National Coffee Association. As prices have risen, people “have not necessarily been cutting back coffee consumption,” Kona Haque, head of commodities research at ED&F Man, a top trader in agricultural goods, told Bloomberg Television. “They’ve been trading down.”
Exactly how they do this depends very much on whether a person views coffee as essential fuel or a quintessential luxury. An aficionado who craves a particular variety of bean or darkness of roast is going to do it differently from a busy parent who grabs a cup after the school run.
Ed Harrison, a managing director at communications firm Inkhouse, falls into the first category. He used to go to a coffee shop six to seven times a week, but now visits just four times a month. Instead, he’s purchased a grinder, drip-coffee maker and espresso machine for his Massachusetts home.
It’s expensive upfront but “there’s no comparison” in the daily savings, Harrison said.
Workers wash and dry coffee cherries following a harvest in Jacutinga, Minas Gerais state, Brazil in July.
