Mitigating Coffee Price Increases in Hospitality Operations

How to Use Sourcing Techniques to Fortify Your Business

As 2025 begins, many operators across the hospitality industry have concerns about supply chain changes affecting pricing. One category in particular focus is coffee, which has seen double-digit price increases in recent months. As many industry experts predict prices will continue to go up in the near term, operators are seeking out ways to mitigate price changes. Category experts recommend adjusting your sourcing techniques, including diversifying your sourcing portfolio, paying attention to countries of origin, leveraging coffee trends, and hedging the market.

The Story Behind the Coffee Price Increase

Why are coffee price increases a concern for 2025? There are several factors at play in this category. Bad weather has negatively impacted coffee production in both Vietnam and Brazil – the world’s two top coffee producers – resulting in smaller crops this season. In response, global stockpiles are expected to deplete to keep up with demand for the product. Many predict that global stockpiles may fall to the second lowest level in 65 years.

Additionally, in the United States, potential tariffs on Colombia have been proposed, which would potentially raise prices on the world’s third largest coffee producer.

Intentionally Source Your Coffee Blends

While coffee prices across the board are expected to rise, operators can avoid some of the worst of the increases by choosing international coffee blends. Focusing on blends from Costa Rica, Ethiopia, Guatemala, and Indonesia may provide some relief from increases.

Now is not the time to rely heavily on 100% Colombia blends. Instead, try sourcing more light blends, which are often from Ethiopia or Costa Rica. Overall, a diversification of blends and countries of origin will help your business stay nimble as this category changes.

Leverage Coffee Trends

Over the past two decades, the rise of specialty coffee has introduced consumers to new and exciting ways to enjoy coffee. Now, this interest in unique beverage experiences may provide opportunities to offset coffee price increases.

While consumers never enjoy an increase in prices, an enhanced café or innovative beverage can make them feel like the price is worth the experience. Some trending coffee experiences include:

• Vietnamese-style coffee beverages like egg coffee and coconut coffee
• Beverages with added benefits like collagen- and vitamin-infused coffees
• Expanded decaf options for specialty coffee drinks

Offering these options may help customers feel that you’re providing added value for added price.

Hedging the Market to Avoid Dramatic Increases

Avoiding passing along coffee price increases to consumers is a goal that will help your business stay competitive. Hedging the market now can help you pass along savings to consumers while your competition waits out high prices.

Strategies like futures and options contracts, as well as bulk buying can help you secure lower prices despite the changing market. Bulk buying is one of the most reliable ways to bring down sourcing costs while maintaining quality, as it allows you to leverage higher spend to get a lower price per unit.

Partnering with a group purchasing organization is an easy way to participate in bulk buying, as it allows you to combine purchasing power with other companies for better prices across the board.

Begin Mitigating Coffee Price Increases Today

When a market shift of this size occurs, it’s impossible to completely avoid being affected. However, working with the right procurement partner can help you identify strategies to mitigate price increases and maintain your brand standards.

Foodbuy Hospitality is your complete procurement solution, offering the benefits of group purchasing along with the supply chain expertise of over 600 industry experts. Become a Member today to begin leveraging our industry knowledge.