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Why is Coffee so Expensive?

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Coffee is a must-have staple for millions to wake up in the morning, and one of the few things in life that we rarely think about beyond what we put in it. It’s a beverage that we often take for granted, which is a problem, considering how expensive and sought-after it is. While coffee is still being produced and exported, there are legitimate issues involved in coffee farming and production that threaten to end its reign as a top crop to farm.

There are so many intricacies involved in coffee farming and production that influence the cost and final price, from business deals to environmental factors. Coffee farming is complex and requires specific climates, which can also inflate the cost and, eventually, the price a consumer pays. While a $6 latte may seem pricey, remember that there are many layers to coffee price. Let’s take a look at the possible influences of coffee costs and why they can be expensive:

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The Quality of Coffee Has Changed

The quality of coffee that we see today is incomparable to the quality that was once acceptable, which was almost like sludge in a cup. As coffee became more popular, the demand for higher quality coffee increased. With the increase of coffee quality and flavor, the cost of coffee inevitably increased from these changes.

When coffee was first popular, it was farmed for quantity over quality. As the change for better-tasting coffee started, farmers started to change where and how they farmed. Some of the best coffee in the world is grown in specific areas, creating premium coffee beans that can’t be reproduced unless grown there.

Labor Costs and Other Expenses

coffee shop
Image Credit: Joshua Rodriguez, Unsplash

Getting coffee from the lands of the coffee farms to the barista handing you your tall mocha latte is no easy feat, with hundreds of different business and labor costs involved. By the time your coffee has reached your hands, many people have picked, processed, and handled the coffee beans used to make your morning joe.

With the cost of labor steadily rising, the wholesale cost of coffee will inevitably rise as well. The slightest increase in wholesale coffee can cause massive inflation in coffee prices. However, wholesale prices can’t go any lower, or the farmers will not be able to afford to farm it any longer. Hopefully, the cost of coffee will not increase anytime soon.

Supply and Demand

As with any market, there are huge trends in the coffee industry that can cause a disruption in the supply and demand chain. When a new coffee trend picks up, the demand can increase seemingly overnight. As long as the supply can meet the demands, the financial effects of coffee trends tend to go unnoticed. However, with most trends that involve coffee shops, the result is usually an overpriced cup of coffee that leaves you wondering why it’s so expensive.

Top-shelf, premium quality coffee is highly sought-after, which is why it’s often far more expensive than the average bag of coffee. A lot of other factors go into premium-grade coffee besides supply and demand, but it still impacts the luxurious coffee brands as well.

Coffee beans raw
Image Credit: Young_n, Pixabay

Environment and Climate Change

The environmental impacts have been devastating to coffee farmers, especially from the negative effects of climate change. Farmers are scrambling to find new places to grow coffee plants, while multi-generational farming businesses have closed down due to the changing climate. Because of these environmental issues, it has majorly impacted the overall coffee exportation and caused coffee prices to increase.

One of the worst cases of environmental factors that impacted a country’s coffee yield is Haiti, a country that once dominated the coffee industry. While there are other reasons that almost completely halted any coffee exportation, Haiti suffered multiple earthquakes and climate-based events that devastated the farmlands.

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Conclusion

Coffee is one of the biggest exported goods in the world, with major coffee countries exporting millions of coffee beans every year. The farmers work hard to produce and harvest coffee to meet the demands each year, but there are factors that can affect their yield and create unforeseen price changes. Between climate change and labor alone, the price of coffee will also continue to increase as well. While it may be hard to justify spending $6 on a latte, it’s important to remember that there are a lot of reasons why coffee is so expensive.

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Featured Image: Marco Verch Professional Photographer, Flickr

Kate MacDonnell

Kate is a lifelong coffee enthusiast and homebrewer who enjoys writing for coffee websites and sampling every kind of coffee known to man. She’s tried unusual coffees from all over the world and owns an unhealthy amount of coffee gear.

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