Let’s start with the good news: we are not raising prices right now. While the coffee industry faces significant challenges, we’ve taken proactive steps to delay price increases for as long as possible.
Commodity Prices: The Industry-Wide Challenge
Over the past year, coffee commodity prices have surged by more than 70%. This dramatic increase stems from a combination of weather disruptions in key growing regions, rising global demand, and ongoing supply chain challenges. These pressures are impacting every coffee supplier, from large-scale operations to small, independent roasteries.
At our roastery, we’ve been able to manage these challenges by securing long-term futures contracts. This strategy has allowed us to lock in pricing through at least mid-2025, insulating you from immediate cost increases. While some providers have already passed these costs along to their customers, we’ve been fortunate to hold steady.
Tariffs: The Potential Impact of Policy Changes
In addition to rising commodity prices, there are ongoing discussions at the federal level about imposing new tariffs on imports. If these tariffs are enacted, they could have an immediate impact on coffee prices and related materials, such as packaging.
Here’s what this could mean for your business: for every 10% tariff applied to general imports, roasted coffee prices may rise by approximately 3-4%. Packaging materials, which are also largely imported, would face similar increases. These changes would ripple across the entire supply chain, affecting all coffee suppliers equally.
We’re closely monitoring these discussions and will keep you informed of any developments. Transparency is our priority, so you’ll have the information you need to plan ahead.
Consumer Sensitivity and Strategic Opportunities
We understand that your customers are price-conscious, and any adjustments to your pricing can be challenging to navigate. That’s why we recommend exploring ways to offset potential increases by offering high-margin add-ons.
For instance, our 2-ounce coffee bags are an excellent way to create additional revenue streams. Perfect for customers who want to take home enough coffee to brew a pot, these bags offer strong profit margins.
Here’s how this can help:
If rising costs narrow your margins on menu staples like breakfast sandwiches, selling just a few 2-ounce bags each day can make up the difference. This allows you to keep your core pricing stable while giving your customers something extra to enjoy at home.
How We’re Supporting You
We’re committed to helping you navigate these challenges with a focus on your success. Here’s how:
- Stable Pricing Through Strategic Planning: Thanks to our futures contracts, you won’t see immediate price increases.
- Proactive Communication: If changes become necessary, we’ll give you plenty of notice and clear explanations.
- Custom Solutions: We’re here to brainstorm opportunities like add-ons or other strategies to protect your margins.
Looking Ahead
We know that rising costs and policy changes can feel overwhelming, but you’re not in this alone. By planning ahead and exploring creative solutions, we can navigate these challenges together.
If you have questions about pricing, add-on opportunities, or how to prepare for what’s ahead, we’re here to help. Thank you for trusting us as your coffee partner—we look forward to continuing our shared success into 2025 and beyond.
Brian
