Coffee Prices to Rise in Canada While Other Commodities Drop
While wheat, corn, barley, and canola prices decline across global markets, coffee prices are climbing steadily. The price of arabica coffee recently hit a 13-year high of $2.70 USD per pound, reflecting an 80% increase compared to September 2023. This surge is primarily attributed to severe droughts and wildfires in Brazil and Vietnam, which together produce nearly half of the world’s coffee supply.
Impact on Canadian Coffee Chains
Historically, coffee price surges have led to modest price increases at major chains like Tim Hortons, though the cost of coffee beans only accounts for 5-10% of a cup’s price. Labour, rent, and operational costs dominate pricing. While some price adjustments are expected, drastic changes are less likely in the short term.
Climate change remains the primary driver of these price hikes, shrinking the regions suitable for arabica cultivation. At the same time, global demand for coffee is rising, particularly in emerging markets such as China and India.
Canada’s Coffee Culture
Canada ranks as the 11th-largest coffee consumer globally, with an average intake of 1.57 cups per person daily. For many Canadians, coffee is more than a beverage; it’s a lifestyle. Over a lifetime, an average Canadian is expected to drink about 35,000 cups.
However, countries like Luxembourg, Finland, and Norway outpace Canada, with per capita consumption exceeding five cups per day in some regions.
Exploring Lab-Grown Coffee: A Sustainable Alternative?
Efforts to develop lab-grown coffee have gained momentum, with companies like Atomo Coffee raising millions to create molecular coffee from plant waste. The goal is to reduce water usage, carbon emissions, and deforestation associated with traditional farming.
While promising, lab-grown coffee is not yet mainstream. Until scalability improves, it will remain a niche option. For now, coffee lovers in Canada may need to brace for higher costs or stock up when prices dip.
Challenges for Local Cafés in Toronto
Small coffee roasters in Toronto, such as Cherry Bomb Coffee and Found Coffee, are grappling with the rising costs of beans. Many have no choice but to increase prices, citing supply chain challenges, rent, and labour expenses as key factors.
Cherry Bomb recently announced a “significant” price increase to cover surging green bean costs. Similarly, Found Coffee’s owner, Leighton Walters, highlights the difficulties of meeting consumer expectations for low prices when premium coffee requires intensive labour and specialised sourcing.
Supporting Local Coffee Shops
Despite rising prices, local coffee shops emphasize the importance of fair trade practices, sustainability, and quality. By paying slightly more for a cup of coffee, customers are supporting independent businesses that are committed to delivering exceptional products while navigating economic challenges.
The next time you notice a price increase, remember: it’s not just about the cost of beans. It reflects the broader economic and environmental challenges shaping today’s coffee industry.
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