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Why Is Coffee So Expensive? Exploring some of the factors

In the current economic climate, many consumers are starting to look at the price of their favorite items. One of those favorite items is undoubtedly a cup of coffee, which is becoming increasingly more expensive according to consumers. But is coffee getting more expensive? And if so, why is coffee so expensive?

is coffee getting more expensive?

Why Is Coffee So Expensive?

While you might find a good deal in your local supermarket from time to time, you must expect to pay more for superior coffee quality. This does not only mean coffee beans from your local coffee shop, but also premade coffee from your local coffee shops. But what is causing this increase in price?

Coffee Farmers

An increasingly large number of consumers are very aware of where there coffee comes from, and if the coffee farmers received fair pay for their products. Because of this increasing awareness, coffee producers and suppliers are focusing more on fair trade products, which does affect the cup of coffee price.

However, this fair price for coffee beans does mean a better life for coffee farmers, even though consumers have to pay a little more in coffee shops.

Quality

At the end of the day, everyone can agree that quality coffee beans can cost a little more, which is often due to the fact they are harvested by hand, eliminating any unsuitable beans to influence the bean selection negatively.

All that manpower certainly adds to coffee prices too.

Risk Factors

Believe it or not, but producing beans and bringing them to the consumer is actually subject to lots of risks. First, climate change had a severe impact on farms that grow beans, and the farms are becoming increasingly smaller!

Of course, many things can go wrong with the crop as well. From infestations in organic crop to new harvesting techniques that speed up the process, but lose some of the crop in the process. These are all small variables that eventually contribute to the higher price of your favorite cup of joe.

As these risk factors can impact a business for years in the future, it does not take a maths genius to figure out why farmers must charge a higher price for their product.

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Pandemics like COVID-19 possibly influence the price of this luxury item further. Due to isolation and lockdown rules all over the world, many business packing and growing beans have been out of business. While the sales of the product may have increased during the panic buying stage, many worry about the price of their favorite cup of joe in the future.

Hopefully, the impact of the world’s devastating health crisis can be kept to a minimum, but we expect there will be an effect.

Coffee Culture

Now, let us be honest. The increase in the price for a cup of coffee does not solely come down to production cost, it has a lot to do with the coffee culture as well. Quality coffee beans and specialty coffee now have a huge following, which undoubtedly has an effect on coffee prices.

When a product is in demand, more businesses want to have their slice of the cake. But to stand out, they need products that stand out from the competition. Using the best coffee beans, focusing on fair trade, and even using special coffee making techniques can all be major draws for consumers. Of course, this also has an influence on coffee prices.

Coffee shop rent & equipment

Commercial premises are not cheap and are usually rented by coffee shops, this means that their turnover must be enough to pay for the prime location they have obtained for their shop.

Of course, you cannot forget about all the expensive equipment that is needed to make your premium coffee or speciality coffee on the spot, which can be a significant investment.

In addition to the equipment and rent of the shop itself, you also need to think about the cost of the decor and other facilities that are offered in the shop.

Ultimately, there are bills that need to be paid, and that definitely influences the current price of your favorite beverage.

Location

Believe it or not, the price of coffee can vary considerably depending on where you are. If you head to Italy as a tourist, you may pay through the nose for a cup of coffee, while the locals actually have different coffee habits. The same applies to all coffee-consuming countries.

Of course, the last two factors don’t matter quite as much if you’re buying freshly roasted beans, but even the roaster has to pay for rent and equipment!

Has Coffee Become More Expensive In The United States?

The average cup of coffee was about $1.45 in the United States in the nineties. A mere thirty years later, inflation has wrecked some havoc on our favorite beverage, as the average price for a cup of coffee has gone all the way up to $2.15.

To put it into perspective, a cup of coffee now costs 48% more compared to the nineties. So, you could argue that the price has almost doubled over the past thirty years.

While you may think that is really bad, you do have to consider that the cost in other countries can be a lot more. So, let’s investigate the inflation, the reasons behind the increase in price, and determine if a decent cup of coffee is worth the cost.

Why Does The Price Vary In Different Countries?

As we discussed the inflation, we made it clear that coffee price can vary according to the country you find yourself in. But what causes this fluctuation in price?

Well, there are various reasons why certain countries ask a lot more for coffee than others. One of the prominent reasons is culture. While coffee is entangled with some cultures, other cultures are bigger on tea.

China is a prime example. This country places the emphasis on tea, and coffee is considered as more of a luxury. As a result, coffee costs a lot more there. Even big corporations such as Starbucks adjust their marketing and pricing policy depending on the country they are in.

Another variable where coffee cost is concerned is the overall affluence of the area. Larger cities such as Zurich, Dubai and Copenhagen are considered quite affluent, and you will notice this immediately when you purchase a coffee over there.

So, prices do not only vary according to country, but also city affluence!

Is Brewing Coffee At Home Cheaper?

In the long run, it is most certainly cheaper. Of course, brewing the same quality of coffee you would get from a barista is not as easy as you might think. In fact, you often need to invest in some specialist equipment, so you can brew higher quality in the convenience of your home.

The equipment is just one part of the equation though, because you also need to look for quality coffee beans. At the end of the day, quality beans always provide you with the best flavor and aroma, especially if you grind them up right before you brew.

Getting quality beans does not have to be unaffordable though, especially if you take advantage of coffee subscriptions and trustworthy suppliers. Once you immerse yourself in the coffee culture, you start knowing where to look.

For getting started with brewing coffee at home, check out our guide to coffee for beginners.

Should you pay the price for decent coffee?

As briefly mentioned before, this is a personal choice. The amount you invest in fresh coffee beans, or a simple cup of coffee from your local Starbucks all depends on your requirements.

If you believe the product is worth the price, then go for it. As coffee lovers, we think the current prices are still decent, despite the increase over the past thirty years. Still, it could be worse, we could be paying a $7.00 average!

Frequently Asked Questions

How Much Is Too Much For Coffee?

We believe this is a personal question for everyone. Those who are fully submerged in the coffee culture and the varieties of coffee will be more willing to pay a higher price for their favorite coffee compared to those who only drink ground coffee from generic brands.
At the end of the day, you decide how much is too much for a cup of coffee. Of course, if you are after premium quality from an exotic location, your price expectation needs to match.

What Is The Average Price For A Cup Of Coffee?

The average cup of coffee in the United States costs approximately $2.15. While this overall price may be a little shocking to you, the United States is nowhere near the range of countries that charge the most for their coffee.
Countries such as Saudi Arabia charge a staggering $7.00 for a cup of coffee, and in Berlin you can expect to pay $6.00 for your cappuccino.
So, the average price of coffee in the United States does not seem so bad compared to that.

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About Shabbir

Shabbir is the Chief Caffeine Officer at Coffee In My Veins. When he's not weighing out coffee beans for his next brew, you can find him writing about his passion: coffee.

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