Wholesale coffee prices are suddenly a hot topic, with coverage right across the media, from the New York Times to TikTok. The question on everyone’s lips is: why are coffee prices getting so high – and are they going to come down?
Two words: climate change. Another two: extreme weather.
The world’s two largest coffee-producing nations, Brazil and Vietnam, have both been struggling with drought in recent years. This at a time when Brazil (which produces one-third of the world’s coffee) was still recovering from the severe frosts of 2021 – it’s now thought that it could take a further two years for Brazil’s coffee crop to recover.
Meanwhile in Vietnam, which produces most of the world’s robusta beans (often used in espresso blends), the drought has been followed by a period of excessive rain that’s also been detrimental to the crop.
In tandem, the demand for coffee is increasing. China’s consumption is up more than 60 per cent over the past five years. Result: even the price of cheap standard coffee has more than doubled.
Yes and no. Coffee can only be grown in the belt between the Tropics of Cancer and Capricorn. It needs a tropical climate with warm temperatures, distinct dry and rainy seasons, and rich soil. Altitude also plays a crucial role.
It may be the case that, as the earth’s temperature rises, other regions could become more suited to coffee farming – however those warmer temperatures also mean that coffee plants are likely to become less productive and the places where coffee can be grown could actually shrink.
In any case, demand is currently outstripping supply, leading to unprecedented prices – which are not at all a boon for coffee farmers as their production costs have also risen dramatically.
Yes, they are paid premiums based on the quality of the beans they produce. But producing speciality-grade coffee is highly demanding in terms of time, labour and resources; the premiums do not protect the farmers from price fluctuations.
Now that the base price of standard coffee is so high, the farmers can potentially earn the same price for [the somewhat easier job of] growing standard coffee as they previously did for speciality beans.
So these are precarious times. In the context of higher world prices, we also need to ensure that the farmers producing speciality coffee continue to be properly rewarded and compensated for their efforts, otherwise there’s little incentive for them to keep at it.
You and your colleagues may have noticed that, along with retailers, cafes and coffee shops all around the country are putting up prices.
Although the coffee market has often been volatile in the past, there has never been so much uncertainty about if and when prices might stabilise, or see a downward correction.
When prices go up, regular trips to high street cafes start to seem like a luxury. In the coming months prudent coffee drinkers will likely rely even more heavily on their workplace coffee supply for their caffeine fix. They’ll also place greater value on a quality coffee offer at work…
Now is the ideal time to consider rewarding staff with freshly ground bean-to-cup coffee at work since the cost of high-quality coffee in the workplace remains relatively small for something this highly appreciated.
If budgets don’t allow for a free offer, why not consider a solution in which staff pay for their own coffee? It will still be a fraction of what they’d be charged out on the high street. More convenient too.
We have great office coffee machine solutions to show you – to buy, rent or lease – so get in contact today to arrange a demonstration at one of our London or Chessington showrooms.