At the end of February, Highwire Coffee Roasters sent a note to its customers letting them know that they had decided to raise the price of most beverages.
Their reasoning was the increased costs of ingredients — something that all food and beverage businesses in the Bay have been voicing concerns over.
“Green (raw) coffee prices have doubled for us in the last year, while the prices of milk, cocoa, and other inputs have also jumped by double digits,” Highwire’s letter said, referring to the the unroasted, green coffee beans sold wholesale to which roasters then apply their unique process. “This has left us in a chronically unprofitable place.”
According to reports by Bloomberg, Brazil’s harvest this year was lower than projected, restricting the supply of arabica beans and raising the price. Overall, the number of suitable coffee-growing areas around the world will decrease dramatically by 2050, according to a report done by PLOS in 2022.
“The main coffee producing countries investigated (Brazil, Vietnam, Indonesia, Colombia) are all seriously affected by climate change with a strong decline in suitable areas and an increase in unsuitable areas by 2050,” the report says.
In Vietnam, the increase in mean annual temperatures is the main factor leading to a decline in suitability.
Robert Myers, the co-founder of Highwire, said the price of coffee has been going up steadily over the past year, and, at first, he watched the price rise but tried not to raise their prices.
Eventually, once the price had doubled, they knew Highwire’s prices couldn’t stay the same. First, they raised the price of coffee beans, but eventually, the increases had to spread to the drinks as well. The price of an espresso at Highwire’s cafe on Broadway in Oakland is now $4.25, up from $3.75 previously. Myers said he felt like they didn’t catch the issue soon enough.
“Basically, all of our ingredient inputs were kind of going up at the same time, and we were asleep at the wheel,” Myers said. “We started this coffee company because we love tasting coffee, but we’re learning on the job how to keep an eye on cost and what we should be pricing things at in order to be able to pay rent, pay employees and benefits, as well as for the actual ingredients.”
Due to not catching the issue right away, Myers thinks Highwire’s price correction will have to be a bit bigger than many other companies. But across the Bay Area and beyond, other coffee shops are feeling these same stressors.
Keba Konte, the founder of Red Bay Coffee, said the price of coffee has risen around 150% in the past couple of years. Red Bay does wholesale and direct to consumer business, and also runs its own coffee shops. Echoing Myers, Konte described how the margins were already pretty thin due to the rising costs across the board.
In response, Konte said Red Bay has raised some of its prices. With the coffee shops, Konte said they can raise prices right away, but with their distributors, it takes around 90 days to raise the price. Konte said it’s not as easy as just raising prices 150% overnight.
“We traditionally have thought of coffee as an affordable luxury,” Konte said. “But as costs keep rising for the consumer and the coffee lovers, they’re not just dealing with higher prices of coffee, but they’re getting higher prices for fuel, for eggs, for other groceries. So at some point they may make different choices around what coffee to buy.”
Konte said consumers may choose to lower their coffee standards as well, buying more commercial coffee, to compensate for the price.
“What the community may see is quality drop, because if the consumers don’t want to pay market price for specialty coffee at the same standards that they’ve enjoyed, they may take a hit on coffee quality,” Konte said.
Jennie Prosser, the director of operations for Souvenir Coffee, said they try to raise their prices by small amounts each year to keep up with the general rising costs, and Souvenir last bumped up prices at the end of 2024. Prosser said she believes Souvenir has one of the lower specialty coffee prices for the area, with a 12-ounce drip running $4 and a cappuccino $5.
“We check the market nearly every day and because the price can change daily, sometimes even hourly, we make a huge effort to buy coffee when it’s at the lowest price to continue to offer affordable pricing,” Prosser said. “We stay in communication with our importers [Royal, Sucafina, Primavera] so they can let us know when prices dip and we should jump on them.”
Prosser also said that many people aren’t aware of how big the coffee market is and how many factors contribute to its pricing. Contracts for the “C Market,” as it’s called, are typically for the future, usually at least a few months out. She mentioned climate change and current events, but also transportation costs and tariffs on Mexico as things traders would consider when setting the price, since some coffees go through Mexico before reaching the US.
RJ Leimpeter, the owner of Timeless Coffee, said the roastery and vegan bakery has raised its prices as well, but customers have been understanding of the increase so far. An espresso at Timeless’ Piedmont Avenue cafe now costs $4.50, up from $4.25 in late 2024.
Myers agreed that despite the rise in prices, the community has been understanding of Highwire.
“Everybody who lives in the Bay Area is somewhat aware of what’s going on in the world and they’ve been fairly supportive,” Myers said.
Myers also said the inconsistent and insufficient supply may be the new normal.
“There’s a chance that this just fundamentally is permanent, and it just changes the way that coffee is traded,” Myers said.
Konte said that climate-related issues kicked off the rise in prices, but it has been exacerbated by financial speculators and the threat of tariffs. He said that all three of those elements will continue to be present.
Myers said that a lot of people who own coffee shops got into it because of the love of coffee and love of community, and these changes to the market are making it a scary time for the industry.
“I’m not sure what the future holds for people who aren’t global conglomerates,” he said.
