Coffee prices are experiencing a significant surge, with expectations of further increases throughout 2025, according to a recent analysis by Bank of America. The primary driver behind this trend is a shortage of arabica beans, a staple in many coffee blends. As of last Friday, arabica coffee prices reached an unprecedented $4.04 per pound, marking a 26% rise from the previous quarter’s average of $3.20.
This upward trajectory isn’t limited to raw coffee beans. Consumer products are also feeling the impact. In 2024, the average price of a mainstream coffee pod climbed to $0.55, surpassing the notable $0.50 threshold. Similarly, the cost of a cup of drip coffee increased to $0.14, up from $0.13 in 2023.
Several factors contribute to the tightening coffee supply. Vietnam, a leading exporter of robusta coffee, reported a 45% decline in shipments last November due to drought conditions that adversely affected crop yields. Additionally, the outlook for Brazil’s coffee harvest remains uncertain, with concerns about unfavorable weather patterns in the upcoming months.
Given these challenges, Bank of America anticipates that retail coffee prices will continue to escalate as the year progresses. This trend mirrors broader food inflation patterns, where essential items like eggs have also seen significant price hikes due to supply constraints and environmental factors.
Consumers should prepare for higher costs associated with their daily coffee consumption as these supply issues persist.
