In US supermarkets, coffee keeps getting more expensive
Sarah Charles
September 26, 2025
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Ground coffee prices in US supermarkets hit a record $8.87 a pound in August, up 21% YOY – the steepest rise since the 1990s
Tariffs on Brazil and Vietnam have turned America’s most essential import into a bargaining chip
Consumers are trading down, stockpiling, or even swapping to caffeine tablets
COFFEE on American supermarket shelves is becoming increasingly less affordable for the average consumer.
Ground coffee prices in US supermarkets surged almost 21% year-on-year in August, hitting a record $8.87 a pound, according to the Bureau of Labor Statistics. That marks the steepest rise since the 1990s.
High tariffs on imports from Brazil and Vietnam – the world’s two biggest suppliers – have collided with weather-related crop shocks and supply-chain disruptions. Consumers are feeling the pinch.
Coffee is not alone. Grocery prices overall have risen nearly 30% in the past five years, with meat, eggs and dairy also climbing steeply. But coffee is emblematic: unlike beef or pork, the US produces negligible amounts domestically, making tariffs a tax on every coffee break.
For many households, the price increases come as a blow: higher costs just as other food bills are already stretched thin. Some consumers are rationing, others are buying in bulk or turning to caffeine tablets. Reddit forums are rife with talk of “getting used to rationing.”
“More bulk buying in anticipation of higher prices is one of the options that consumers have,” says Thijs Geijer, Economist at ING Research. “But, suppose you go to the store tomorrow to buy in bulk , then you spend more money now to save money in the long run. If you want to save money now, then you’ll trade down to private label, only buy in promotion, or switch to a cheaper supermarket.”
“However, there are two things that reduce the impact of any price-led adjustment. First, elasticity for in-home coffee consumption is relatively low so even with higher prices, most consumers stick to similar habits. And second, the underlying long-term trend is towards more expensive single-serve pods or capsules. Retailers can also pre-buy more inventories to delay the need for price increases on shelves.”
Supermarkets are adjusting too. The giant Kroger chain says shoppers are making smaller, more frequent trips, turning to coupons, and trading down to private-label coffee.
“First, we have to recognize that ‘coffee’ isn’t one single market,” says Martin Mayorga, Founder and CEO of Mayorga Coffee. “It spans from cheap, commodity-grade products to over-hyped hyper-specialty and lots in between.”
“When prices spike, consumers naturally migrate downward in the spectrum to protect their household budgets. At Mayorga, we see this manifest as more demand for bulk size, grocery value formats, and online discount channels. However, we have also absorbed a very high percentage of the increases, and have not raised prices as aggressively as our competitors who seek massive margins. What’s most important is that people still want great coffee they can trust.”
Shrinkflation compounds the pain: bags that once weighed 16 ounces now arrive on shelves at 10.5 ounces. In a category defined by habit, such changes risk breaking routines – and perhaps, as some analysts warn, losing a generation of coffee drinkers altogether.
The supply squeeze
The squeeze at the checkout counter is rooted in deeper supply-side turmoil. Coffee futures in New York have approached all-time highs this autumn, as hedge funds pile into bets and exporters scramble to unwind positions to avoid costly margin calls.
Tomas Araujo of StoneX told Reuters that most of this recent rally is tariff-driven, exacerbated by supply chain disruptions. Brazil’s erratic weather has cut output, while labour shortages and logistics strains amplify volatility.
“Yes, prices rise, but so do wages and costs across the supply chain,” says Martin. “Producers finally have a chance at fairer returns, and that matters for the overall viability of the industry.”
Tariffs remain a sharp distortion. By imposing levies on products America does not grow at scale – coffee, cocoa, tea – the White House has turned a critical import into a bargaining chip. The National Coffee Association has lobbied for exemptions, arguing that coffee is an “unavailable natural resource” vital to both consumers and the wider economy.
Some progress was made with a recent executive order hinting at possible relief. But for now, roasters and retailers must pay more for coffee, and much of that cost is passed to shoppers.
For roasters, high prices create dilemmas. Reformulating blends – substituting lower-cost robusta for arabica, or introducing cheaper origins – risks alienating loyal customers.
“Reformulating blends to ‘engineer value’ is, in my view, brand suicide,” says Martin. “It erodes trust and it betrays both consumers and producers. The better approach – and what we’ve done at Mayorga – is to embrace transparency, manage costs intelligently, and communicate clearly with consumers.”
“Coffee is about culture, community, farmers’ livelihoods. If a company sacrifices flavour integrity for short-term savings, they’ll lose in the long run. Brands that stay grounded in quality, fairness, and consistency will continue to thrive, even in volatile markets. Those of us who are willing to operate at very low margins will continue to get the lion’s share of the growth.”
Dilution is another route: iced “coffee buckets” and milk-heavy lattes stretch beans with syrups, ice and dairy. Such tactics preserve the illusion of abundance while discreetly reducing the coffee content.
Yet if younger consumers grow used to sugar-forward, diluted drinks, the very idea of coffee as a distinctive product could erode. The paradox is striking: the more scarce and expensive coffee becomes, the less actual coffee may end up in cups.
Trading down and tuning out?
For consumers, the response is already visible. When inflation spikes, research shows, consumers downgrade to cheaper blends; when prices soften, they trade back up. In Europe, coffee has even been shown to swing from “luxury good” to “inferior good” depending on price cycles. The same dynamic now looms in the US.
The risk is that tariffs accelerate this shift. Already, Dunkin’ and Folgers have reported volume declines even as net pricing rose. Café Bustelo, with its younger and more diverse customer base, has reaped some gains.
But overall, the supermarket aisle is showing fragility: unit sales are slipping, even while dollar sales rise. Specialty brands, once making headway on grocery shelves, may see their gains stall as consumers prioritise cost. The “everyday luxury” of coffee risks becoming less everyday – ground coffee alone is up 36%.
“There will always be a segment of consumers who treat coffee as nothing more than a caffeine delivery system,” says Martin. “Those people may drift to energy drinks or pills, and that’s fine – they were never engaged in the real coffee culture to begin with.”
“Younger generations are actually showing more interest in authenticity, sustainability, and the story behind their cup. That’s where Mayorga is laser-focused: making coffee approachable, affordable, and healthy for all. If we keep telling that story and delivering on it, coffee will remain relevant and vital for generations to come.”
Some analysts still warn of demand destruction if prices stay high. That spectre haunts today’s market. Unlike in past booms, consumers now have more alternatives: energy drinks, functional sodas, or simply caffeine tablets. Coffee, once unrivalled, faces genuine substitutes.
“If you calculate cost-per-serving then coffee remains very affordable compared to other drinks, even after price increases,” says Thijs.
“Indicative US price ranges tell the story: a can of energy drink costs $1–3, a high-end coffee capsule $0.80–1.40, a mid-market pod $0.45–0.60, and ground coffee just $0.15–0.25 per serving. So why are younger consumers shifting to alternatives? Convenience is a big part: you don’t need to invest in a brewer, and buying coffee usually means a larger upfront outlay, which makes it feel more expensive than grabbing a single can.”
The question is whether the industry and policymakers can reverse course. If exemptions for coffee are negotiated into trade deals, prices could ease, restoring stability to a market built on routine. If not, America may discover the limits of its reliance on coffee.
Coffee Intelligence