2025 Coffee Trends: How the Coffee Industry is Evolving

As we close 2025, the coffee industry, one of the world’s most traded commodities, is grappling with a perfect storm of challenges that are reshaping how coffee is grown, distributed, and consumed. This year coffee lovers around the globe have faced rising prices for their favorite brews. From supermarket shelves to coffee shop menus, coffee prices have surged, leaving consumers questioning the spike and forcing many small roasters and coffee shops to close their doors. Why is coffee so expensive? 

The coffee industry has always been subject to price fluctuations, but the recent surge in coffee prices is unprecedented. By late 2024, coffee prices had risen by 70% since the beginning of the year. A mix of adverse weather, climate change, rising global demand, political tensions, and supply chain uncertainties has driven this dramatic increase.

2025 Coffee Trends Factors Driving Change

Adverse Weather Conditions

Climate change is one of the most significant factors impacting coffee production:

• Brazil, the world’s largest producer of Arabica coffee, faced its worst drought in 70 years in mid-2024, followed by heavy rains that damaged flowering crops.
• Vietnam, the top Robusta producer, experienced both drought and heavy rainfall, further reducing global output.

Increasing Coffee Demand

Demand for coffee continues to grow globally, putting additional pressure on limited supplies:

• Emerging markets like China have seen coffee consumption more than double in the past decade, driven by interest in premium and specialty products.
• Cold brew coffee consumption in the United States has surged, increasing 300% over the past seven years.
• Consumers are also seeking brands that prioritize sustainability and quality, driving demand for environmentally friendly and local coffee options.

Political Tensions and Logistics

Global political and logistical challenges are further straining the coffee supply chain:

• Container shortages and rising freight costs, worsened by geopolitical tensions in the Red Sea, have disrupted global coffee exports.
• The EU Deforestation Regulation (EUDR) and U.S. tariffs have created uncertainties for exporters and importers, further increasing costs.

The Impact of COVID-19 on Coffee Trends

The COVID-19 pandemic left a lasting mark on the coffee industry, reshaping consumption habits and supply chains:

• At-Home Brewing Boom: Lockdowns drove consumers to brew coffee at home, leading to a spike in sales of espresso machines, pour-over kits, and other brewing equipment.
• Shift to E-Commerce: With many coffee shops closed, coffee brands leaned heavily on online sales and subscription services, a trend that continues well into 2025.
• Supply Chain Disruptions: Shipping delays, labor shortages, and increased costs for transportation and packaging strained producers and roasters.
• Resilience and Innovation: The pandemic highlighted the need for sustainable supply chains, pushing companies to invest in traceability and diversify their sourcing strategies.

The Impact on Stakeholders

Across the global coffee sector, late 2025 marks a period of margin compression, consolidation, and strategic divergence.

JDE Peet’s

KDP's recent purchase of JDE Peet’s is an example of the ever-changing landscape of coffee. KDP purchased JDE Peet’s to become a global coffee powerhouse, while separating its beverage legacy into its own streamlined business. This merger is a strategic consolidation play within one of the fastest-growing global consumer categories — coffee. Keurig Dr Pepper (KDP) is acquiring JDE Peet’s to unify some of the strongest coffee assets in the world under one roof and to create a pure-play global coffee company that can scale with efficiency and margin discipline. Creating two separate companies, Beverage Co. and Global Coffee Co. "The rationale is to create sharper strategic focus, unlock synergies (estimated at ~$400 million over 3 years), and generate value through more specialized businesses."  PR Newswire

Why this matters?

This move signals that coffee is becoming the new “beverage frontier” — the next category consolidation after soda and energy. KDP’s acquisition of JDE Peet’s validates the space as one where brand, distribution, and technology integration drive outsized returns.

Starbucks

Starbucks is restructuring for operational efficiency and near-term profitability. September 9, 2024, Brian Niccol officially became the Chairman & CEO of Starbucks.  He inherited several significant headwinds, sluggish coffee shop sales, consumer backlash, operational efficiencies, labor & union pressure coupled with wage inflation, and staffing shortages. Throughout 2025 there have been supply chain volatility, inflation, rising costs including massive tariffs.

Starbucks has increased menu prices multiple times and closed over one hundred coffee shops, including their Seattle Capitol Hill Reserve Roastery in September 2025 to cope with rising costs. Included in these changes are undergoing a major "Back to Starbucks" restructuring, corporate layoffs, coffee shop closures, menu simplification and investments in coffee shop remodels.

Lavazza

Lavazza is betting on long-term brand integrity and sustainable production. Known for its dedication to quality, Lavazza has also been forced to raise prices to manage rising production costs. Lavazza's chairman, Giuseppe Lavazza, has described the current price increases as "unprecedented" and said that the coffee supply chain is under significant pressure. "Over the last four years, where prices rose so much – [it was] 80 per cent speculation, especially hedge funds." That has led to higher costs for consumers and a decline in consumption – down 3.5 per cent last year – Lavazza said.  MSN

Nestlé

Nestlé is leveraging scale to maintain pricing power and protect global volume. Nestlé, one of the largest coffee companies, plans to revise pricing in 2024 and pack sizes to navigate the "tough times" ahead, according to David Rennie, head of Nestlé’s coffee brands. Nescafé shrinkflation: "In August 2025, Nestlé faced backlash from UK consumers after quietly reducing the size of its Nescafé jars from 200g to 190g while keeping the price the same. The change meant customers received six fewer cups of coffee per jar."  Bloomberg

Importers and Roasters

Rising Costs and Industry Pressure

Importers and roasters are experiencing severe margin compression as cost drivers reshape the industry. Skyrocketing input costs, volatile green coffee prices and ongoing supply chain disruptions have raised baseline cost of doing business.  Compounded by tariffs, wage inflation and chronic staffing shortages, erode profitability and are forcing many to reconsider pricing strategies and even the ability to remain in business.

For many small and mid-sized operators, these pressures are forcing difficult decisions: whether to raise retail prices, absorb losses, or exit the market altogether. Large-scale players with diversified operations and vertical integration are better positioned to weather volatility, but independent roasters and importers—often the heart of the specialty coffee movement—are being squeezed hardest. As a result, 2025 has become a year of strategic realignment, where sustainability, efficiency, and scale determine who can remain viable in a rapidly tightening global coffee economy.

Cooperatives and Farmers

Smallholder farmers are bearing the brunt of the crisis:

• Rising costs for labor, fertilizer, and operations have eroded earnings and threatened farmers livelihoods and the stability of the global coffee supply
• Fixed-price contracts have left cooperatives struggling to adapt to price volatility. Driven by speculation and climate shocks, this has created unpredictable income cycles, making long-term planning nearly impossible
• Cooperatives are strained, struggling to provide financing and secure export contracts amid tightening global credit conditions.
• Farmers face mental health challenges from financial instability and income unpredictability. Millions of smallholder farmers risk being pushed out of coffee production entirely, jeopardizing the future of specialty coffee itself.

The Coffee Market Outlook

Price Volatility

The coffee market is expected to remain volatile, with prices continuing to rise due to ongoing supply and demand imbalances.

Shifts in Production

Farmers are prioritizing lower-grade coffee varieties that require less labor, potentially threatening the future of specialty coffee unless premiums increase.

Consumer Behavior

Higher prices are reshaping how consumers buy and drink coffee:

• Price-conscious buyers are turning to at-home brewing over coffee shop visits.
• Roasters are passing higher costs onto consumers, leading to more expensive retail and wholesale coffee products.

The Road Ahead

As we close 2025, the coffee industry is navigating a landscape shaped by climate change, political tensions, tariffs, and the lingering effects of the COVID-19 pandemic. Leading brands like JDE Peet’s and Starbucks are adapting with sustainable investments and strategic price adjustments, while consumers must adjust to higher costs and evolving product offerings.

Artificial intelligence is now emerging as one of the most powerful tools reshaping the global coffee sector. From precision agriculture that now predicts crop yields and detect disease, to coffee roasting systems driven by AI, that ensure flavor consistency and optimize energy use, technology is redefining every step from farm to cup. Predictive analytics strengthen supply-chain resilience, while machine learning models help companies forecast demand and manage volatile pricing. Yet, integrating AI across such a fragmented and tradition-based industry is not without challenges—data infrastructure, capital investment, and equitable access for smallholder farmers remain significant barriers. Implementing technology and business expertise across such a broad category with so many moving parts can be challenging. To fully realize AI’s promise, collaboration among growers, cooperatives, and global brands will be essential to ensure that innovation enhances both profitability and sustainability.

The challenges may be steep, but the industry is showing remarkable resilience and innovation, ensuring that your daily cup of coffee remains part of your routine. Stay tuned as we continue to explore the trends shaping the future of coffee in 2026 and beyond.

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